area handbook series 

Uruguay 

a country study 




Uruguay 

a country study 



Federal Research Division 
Library of Congress 
Edited by 



Rex A. Hudson and 
Sandra W. Meditz 
Research Completed 




On the cover: A gaucho displays an ornamental saddle and 
harness at a festival. 



Second Edition, First Printing, 1992. 

Library of Congress Cataloging-in-Publication Data 

Uruguay : a country study / Federal Research Division, Library of 
Congress ; edited by Rex A. Hudson and Sandra W. Meditz. — 
2nd ed. 

p. cm. — (Area handbook series, ISSN 1057-5294) (DA 
pam ; 550-97) 

"Supersedes the 1971 edition of Area handbook for Uruguay 
written by Thomas E. Weil, et al." — T.p. verso. 

"Research completed December 1990." 

Includes bibliographical references (pp. 249-272) and index. 

ISBN 0-8444-0737-2 
Copy 3. Z663.275 . U78 1992 

1. Uruguay. I. Hudson, Rex A., 1947- . II. Meditz, Sandra 
W., 1950- . III. Library of Congress. Federal Research Di- 
vision. IV. Area handbook for Uruguay. V. Series. VI. Series: 
DA pam ; 550-97. 
F2708.U855 1992 92-6702 
989.5— dc20 CIP 



Headquarters, Department of the Army 
DA Pam 550-97 



For sale by the Superintendent of Documents, U.S. Government Printing Office 
Washington, D.C. 20402 



Foreword 



This volume is one in a continuing series of books prepared by 
the Federal Research Division of the Library of Congress under 
the Country Studies/ Area Handbook Program sponsored by the 
Department of the Army. The last page of this book lists the other 
published studies. 

Most books in the series deal with a particular foreign country, 
describing and analyzing its political, economic, social, and national 
security systems and institutions, and examining the interrelation- 
ships of those systems and the ways they are shaped by cultural 
factors. Each study is written by a multidisciplinary team of social 
scientists. The authors seek to provide a basic understanding of 
the observed society, striving for a dynamic rather than a static 
portrayal. Particular attention is devoted to the people who make 
up the society, their origins, dominant beliefs and values, their com- 
mon interests and the issues on which they are divided, the nature 
and extent of their involvement with national institutions, and their 
attitudes toward each other and toward their social system and 
political order. 

The books represent the analysis of the authors and should not 
be construed as an expression of an official United States govern- 
ment position, policy, or decision. The authors have sought to 
adhere to accepted standards of scholarly objectivity. Corrections, 
additions, and suggestions for changes from readers will be wel- 
comed for use in future editions. 

Louis R. Mortimer 
Chief 

Federal Research Division 
Library of Congress 
Washington, D.C. 20540 



iii 



Acknowledgments 



The authors would like to acknowledge the contributions of 
Thomas E. Weil, Jan Knippers Black, Kenneth W. Martindale, 
David S. McMorris, Sally Engle Merry, and Frederick P. Munson, 
who wrote the 1971 first edition of Uruguay: A Country Study. The 
present volume incorporates portions of their work. 

The authors are grateful to individuals in various agencies of 
the United States government, private institutions, and Uruguayan 
diplomatic offices, particularly the Uruguayan Mission to the 
Organization of American States, who gave their time, research 
materials, and special knowledge to provide information and per- 
spective. These individuals include Ralph K. Benesch, who over- 
sees the Country Studies/Area Handbook Program for the 
Department of the Army. None of these individuals, however, is 
in any way responsible for the work of the authors. 

The authors also would like to thank those who contributed di- 
rectly to the preparation of the manuscript. These include Lynne 
Shaner, who edited the chapters; Marilyn L. Majeska, who 
managed the editing; Andrea T. Merrill, who performed the final 
prepublication editorial review and managed production; Barbara 
Edgerton, Janie L. Gilchrist, and Izella Watson, who did the word 
processing; and Tim L. Merrill, who provided geographical as- 
sistance. In addition, Joan C. Cook compiled the index, and 
Malinda B. Neale and Linda Peterson of the Library of Congress 
Printing and Processing Section performed the phototypesetting, 
under the supervision of Peggy Pixley. 

David P. Cabitto, assisted by Sandra K. Ferrell and Kimberly A. 
Lord, provided invaluable graphics support. Sandra K. Ferrell pre- 
pared the ranks and insignia charts; Kimberly A. Lord prepared 
the illustrations and all the maps except for the topography and 
drainage map, which was prepared by Harriett R. Blood. 

Finally, the authors acknowledge the generosity of the individuals 
and the public and private agencies who allowed their photographs 
to be used in this study. 



v 



Contents 



Page 

Foreword iii 

Acknowledgments v 

Preface xiii 

Country Profile XV 

Introduction xxiii 

Chapter 1. Historical Setting 1 

Raul Jacob and Martin Weinstein 

FROM PRE-COLUMBIAN TIMES TO THE 

CONQUEST 5 

THE STRUGGLE FOR INDEPENDENCE, 1811-30 8 

Artigas's Revolution, 1811-20 8 

From Insurrection to State Organization, 1820-30 ... 11 

BEGINNINGS OF INDEPENDENT LIFE, 1830-52 11 

The First Presidents, 1830-38 11 

The Great War, 1843-52 13 

THE STRUGGLE FOR SURVIVAL, 1852-75 14 

Intervention by Neighboring Countries 14 

Evolution of the Economy and Society 15 

Caudillos and Political Stability 16 

MODERN URUGUAY, 1875-1903 17 

Militarism, 1875-90 17 

The Return of Civilians 19 

THE NEW COUNTRY, 1903-33 21 

Batlle y Ordonez and the Modern State 21 

The Consolidation of Political Democracy 26 

THE CONSERVATIVE ADJUSTMENT, 1931-43 27 

The Terra Era, 1931-38 27 

Baldomir and the End of Dictatorship 31 

"THERE'S NO PLACE LIKE URUGUAY," 1943-58 33 

The Administration of Amezaga, 1943-47 33 

Neo-Batllism, 1947-51 34 

Decline of the Economy and the Colorado Party, 

1951-58 36 

ECONOMIC CRISIS AND DECLINE 37 

The Blanco Administrations, 1959-67 37 

Pachequism, 1967-72 39 



vii 



The Emergence of Militarism, 1972-73 41 

THE MILITARY GOVERNMENT, 1973-85 42 

The New Situation, 1973-80 42 

The Military's Economic Record 44 

The Opposition and the Reemergence of Parties, 

1980-84 46 

The Transition to Democracy, 1984-85 47 

Chapter 2. The Society and Its Environment 49 

Charles Guy Gillespie 

GEOGRAPHY 52 

Topography and Hydrography 52 

Climate 55 

Land Use and Settlement Patterns 56 

POPULATION 62 

Historical Patterns of Settlement 63 

Contemporary Ethnic Composition 64 

Fertility, Mortality, and Population Growth 65 

Urbanization 66 

Migration 67 

Emigration 68 

SOCIAL CLASSES 69 

The Ranching Elite 70 

Business Elites 71 

Political Elites 71 

The Middle Class 72 

Small Farmers and Rural Workers 74 

Blue-Collar Workers 74 

The Urban Poor 76 

INCOME DISTRIBUTION AND LIVING 

STANDARDS 76 

FAMILY LIFE 77 

HEALTH AND WELFARE 80 

Infant Mortality and Life Expectancy 82 

State and Private Health Care 83 

Social Security Pensions 84 

EDUCATION 86 

The Education System 86 

Historical Origins and Evolution of Education 88 

Educational Reforms under Military Rule, 

1973-85 89 

Education under the Colorados, 1985-88 89 

RELIGION 91 



viii 



Chapter 3. The Economy 95 

Brian D. McFeeters 

GROWTH AND STRUCTURE OF THE 

ECONOMY 99 

Colonial Period 100 

Postindependence Era 101 

The Export Model 101 

Batllism 103 

Stagnation 105 

Restructuring under the Military Regime, 

1973-85 107 

The Sanguinetti Government 109 

ECONOMIC POLICY Ill 

Fiscal Policy 112 

Monetary and Exchange-Rate Policy 113 

LABOR 114 

The Labor Movement 115 

Government Policy 117 

AGRICULTURE 118 

Agricultural Stagnation 118 

Land Use and Tenure 119 

Livestock Ranching 120 

Crop Production 123 

Fishing 125 

Forestry 126 

INDUSTRY 127 

Background of Industrial Development 128 

Autonomous Entities 129 

Private Firms 130 

Construction 130 

Mining 131 

Energy 131 

SERVICES 132 

Banking and Financial Services 134 

Transportation and Communications 136 

Tourism 140 

EXTERNAL SECTOR 141 

Foreign Debt 142 

Trade 144 

Balance of Payments 145 

Economic Integration 146 

Free-Trade Zones 147 



ix 



Chapter 4. Government and Politics 149 

Rex A. Hudson 

CONSTITUTIONAL BACKGROUND 152 

GOVERNMENTAL STRUCTURE 159 

The Executive 159 

The Legislature 162 

The Judiciary 165 

Public Administration 168 

Local Government . 169 

The Electoral Process 170 

POLITICAL DYNAMICS 172 

Political Parties 172 

Democratic Consolidation, 1985-90 179 

Political Forces and Interest Groups 183 

FOREIGN RELATIONS 191 

Foreign Relations under Democratic Rule, 

1985-90 192 

Foreign Policy in 1990 197 

Chapter 5. National Security 201 

Melinda Wheeler Cooke 

THE ORIGIN AND DEVELOPMENT OF THE 

ARMED FORCES 204 

Evolution of the Army 204 

Development of the Navy 208 

Creation of an Independent Air Force 209 

THE GROWTH OF MILITARY INVOLVEMENT 

IN POLITICS 210 

THE ARMED FORCES IN THE NATIONAL LIFE 213 

Manpower 213 

Military Justice 214 

Defense Spending 215 

ARMED FORCES ORGANIZATION, TRAINING, 

AND EQUIPMENT 216 

Army 218 

Navy 220 

Air Force 221 

Uniforms, Ranks, and Insignia 221 

PUBLIC ORDER AND INTERNAL SECURITY 224 

Crime 226 

The National Police 226 

The Criminal Justice System 229 

Appendix. Tables 233 



X 



Bibliography 249 

Glossary 273 

Index 277 

List of Figures 

1 Administrative Divisions of Uruguay, 1990 xxii 

2 Three South American Viceroyalties, ca. 1800 10 

3 Topography and Drainage 54 

4 Average Population Density by Department, 1985 58 

5 Population by Age and Sex, 1985 64 

6 Gross Domestic Product (GDP) by Sector, 1988 110 

7 Employment by Sector, 1988 114 

8 Transportation System, 1990 138 

9 Governmental Structure, 1990 160 

10 Officer Ranks and Insignia, 1990 222 

11 Enlisted Ranks and Insignia, 1990 223 



xi 



Preface 



Like its predecessor, this study is an attempt to examine objec- 
tively and concisely the dominant historical, social, economic, po- 
litical, and military aspects of contemporary Uruguay. Sources of 
information included scholarly books, journals, monographs, official 
reports of governments and international organizations, and numer- 
ous periodicals. Chapter bibliographies appear at the end of the 
book; brief comments on sources recommended for further read- 
ing appear at the end of each chapter. To the extent possible, place- 
names follow the system adopted by the United States Board on 
Geographic Names. Measurements are given in the metric sys- 
tem; a conversion table is provided to assist readers unfamiliar with 
metric measurements (see table 1, Appendix). A glossary is also 
included. 

Although there are numerous variations, Spanish surnames 
generally are composed of both the father's and the mother's fam- 
ily names, in that order. In the instance of Jose Batlle y Ordonez, 
for example, Batlle is his patronymic, and Ordonez is his mother's 
maiden name. In informal use, the matronymic is often dropped, 
a practice that has usually been followed in this book, except in 
cases where the individual could easily be confused with a relative. 

The body of the text reflects information available as of Decem- 
ber 1990. Certain other portions of the text, however, have been 
updated. The Introduction discusses significant events that have 
occurred since the completion of research; the Country Profile in- 
cludes updated information as available; and the Bibliography lists 
recently published sources thought to be particularly helpful to the 
reader. 



Xlll 



Country Profile 




Country 

Formal Name: Oriental Republic of Uruguay (Republica Orien- 
tal del Uruguay). 

Short Form: Uruguay. 

Term for Citizens: Uruguayan(s). 

Capital: Montevideo. 

Date of Independence: August 27, 1828. August 25 celebrated 
as a national holiday (Independence Day). 

NOTE — The Country Profile contains updated information as available. 



xv 



Geography 

Size: 176,220 square kilometers. 

Topography: Country consists mostly (75 percent) of gently roll- 
ing plateau, interrupted at two points by low hilly ridges {cuchillas). 
Remainder fertile coastal lowlands, including narrow coastal plain — 
sandy and marshy, occasionally broken by lagoons — and somewhat 
broader littorals of Rio de la Plata and Rio Uruguay. 

Climate: Country situated in temperate zone (only Latin Ameri- 
can country lying wholly outside tropics). Climate mild and fairly 
uniform nationwide, although northwestern area farther inland has 
warmer summers and drier winters than rest of country. Seasonal 
variations pronounced, but freezing temperatures almost unknown. 
High humidity, high winds, and fog common. Winter warm spells 
can be abruptly broken by a strong pampero, a chilly and occasion- 
ally violent wind from Argentine pampas. 

Society 

Population: In 1991 estimated at 3.1 million; annual rate of growth 
averaged 0.7 percent during 1981-88 period but fell to 0.6 per- 
cent in 1990-91. Relatively low birth rate (17 per 1,000 popula- 
tion in 1991). According to 1985 census, 87 percent of population 
lived in urban areas, Latin America's highest percentage. 

Literacy and Education: In 1990 literacy rate 96 percent (highest 
in Latin America). System of universal, free, and secular educa- 
tion required total of nine years of compulsory school attendance, 
from ages six to fourteen. By 1985 an estimated 70 percent of 
secondary school-age children enrolled in secondary school (also 
highest rate in Latin America). Despite inadequate teaching re- 
sources, quality of education generally high. 

Health: In 1984 total health care spending represented 8.1 percent 
of gross domestic product (GDP — see Glossary). In 1985 number 
of inhabitants per physician 466 (proportion similar to developed 
countries). In 1987 Montevideo had over sixty public health facili- 
ties, including seven major public hospitals. Total mortality rate just 
below 10 per 1,000 population in 1980s. In 1990 infant mortality 
22 deaths per 1,000 population. Average life expectancy at birth 
in 1991 sixty-nine years for men and seventy-six years for women. 

Language: Spanish. 

Ethnic Groups: Largely homogeneous society. In 1990 about 88 
percent of population white and of European descent; 8 percent 
mestizo; and 4 percent black. 



xvi 



Religion: In 1990 about 66 percent were professed Roman Catho- 
lics; 2 percent Protestants; and 2 percent Jews. Remainder non- 
professing or other (less than half of adult population attended 
church regularly). 

Economy 

Gross Domestic Product (GDP): Approximately US$9.2 billion 
in 1990, or US$2,970 per capita, making it one of highest-income 
countries in Latin America. As result of severe recession, real GDP 
declined by almost 17 percent during 1981-84 but increased after 
1985. Led by growth in agriculture and fishing sectors, GDP grew 
by 6.6 percent in 1986 and 4.9 percent in 1987 but slowed to 0.5 
percent in 1988, 1.5 percent in 1989, and 0.9 percent in 1990. 

Agriculture: Self-sufficient in most basic foodstuffs. About 90 per- 
cent of country, including 8 percent arable land, can be used for 
some kind of agriculture, mainly for extensive livestock grazing, 
wheat, rice, corn, and sorghum. In 1988 agricultural activity, in- 
cluding fishing, direcdy generated 13 percent of GDP and provided 
over half of value of exports. Although sector's growth rate in 1989 
was low (1 percent), its output increased an estimated 3.5 percent 
in 1990. 

Industry: Accounted for 33 percent of GDP in 1988. Industrial 
sector geared mostly to small domestic market. Industries included 
meat processing, wool and hides, sugar, textiles, footwear, leather 
apparel, tires, cement, fishing, petroleum refining, and wine mak- 
ing. Industrial production growth rate in 1988 about -2.9 percent. 

Mining and Energy: Exports granite and marble. Semiprecious 
stones also have been found in quantity. Primary sources of energy 
hydroelectricity and imported petroleum (mostly crude oil). 

Services: Accounted for 42 percent of GDP in 1988, including 6 
percent for transportation, storage, and communications and 15 
percent for banking and commerce. 

Currency and Exchange Rate: Uruguayan new peso. In 1990 
average exchange rate was US$1 = N$Url , 171 . On December 31 , 
1990, buying and selling interbank rates were N$Url,573 and 
N$Url,594, respectively, per US$1. On March 2, 1992, average 
exchange rate was US$1 = N$Ur2,674. 

Trade: Exports wool, meat, hides, manufactured goods, and rice 
(total about US$1.6 billion in 1989). Imports fuels and lubri- 
cants, metals, machinery, transportation equipment, and industrial 



xvii 



chemicals (total about US$1 . 1 billion in 1989). Main export mar- 
kets and sources of imports Brazil, Argentina, United States, and 
European Community. 

Balance of Payments: Trade balance positive and steadily improv- 
ing during most of 1980s. Current account balance negative until 
mid-1980s, owing to burden of debt service (reduced from US$613 
million in 1988 to US$449 million in 1989). Foreign debt to United 
States in 1989 about US$6.2 billion of total US$6.7 billion foreign 
debt (one of developing world's highest per capita). Capital account 
balance positive for most of 1980s. 

Fiscal Year: Calendar year. 

Fiscal Policy: Stabilization plan of Julio Maria Sanguinetti (presi- 
dent, 1985-90) — designed to reduce deficit and inflation and im- 
prove balance of payments — had mixed results. Public-sector deficit 
declined, but inflation continued unabated, reaching at least 85 
percent by 1989, owing to monetary and exchange-rate policies. 
Luis Alberto Lacalle de Herrera (president, 1990-) attempted to 
further cut fiscal deficit and tighten monetary policy by introduc- 
ing new taxes on wages and increasing value-added tax (VAT — 
see Glossary) rate, gasoline prices, and public- sector tariffs. 
Nevertheless, inflation rose to 129 percent in 1990 but then dropped 
to 106 percent in 1991. 

Transportation and Communications 

Roads: One of best highway systems in Latin America. In 1989 
about 50,000 kilometers total, including 6,800 kilometers paved 
roads, 3,000 kilometers gravel roads, and over 40,200 kilometers 
dirt roads. 

Railroads: One of best rail systems in Latin America (but pas- 
senger service discontinued in 1988 because of declining ridership). 
In 1989 about 3,000 kilometers total, all 1.435-meter standard gauge 
and government owned. 

Ports: Montevideo, Punta del Este, Colonia, Fray Bentos, Pay- 
sandu, and Salto principal ports. 

Airports: Two international airports (Montevideo and Punte del 
Este) and fourteen other primarily commercial airports with 
permanent- surface runways. 

Telecommunications: Most modern facilities concentrated in 
Montevideo. New nationwide radio-relay network. Total telephones 
in 1990 over 345,000 (highest per capita in South America). In 



xvin 



1990 ninety-nine AM (ten of them shortwave) radio stations, 
twenty- six television stations, and two satellite earth stations. 

Government and Politics 

Government: Republic with three separate branches of govern- 
ment. Constitution of 1967 institutionalized strong presidency, sub- 
ject to legislative and judicial checks. Executive power exercised 
by president (elected for five-year term by simple majority of the 
people through unique voting system), vice president (who served 
as president of bicameral General Assembly), and Council of 
Ministers. General Assembly consisted of thirty-member Senate 
and ninety-nine-member Chamber of Representatives; members 
of both chambers elected to five-year terms through proportional 
representation system. Independent judicial branch headed by 
Supreme Court of Justice. Country's administrative subdivisions 
consisted of nineteen departments, each headed by a governor, 
subordinate to central government and responsible for local ad- 
ministration. Unusual electoral system combined primaries and 
a general election in one event characterized by a 4 'double simul- 
taneous vote," allowing each party's factions to run rival lists of 
candidates. 

Politics: Civilian government restored in 1985 after twelve years 
of military rule. Lacalle of conservative National Party (Partido 
Nacional, usually referred to as Blancos) — elected president in 
November 1989 in country's first free election since 1971 — suc- 
ceeded Sanguinetti of liberal Colorado Party (Partido Colorado) 
on March 1, 1990. Two-party system of these rival parties had 
dominated since nineteenth century but was dealt strong challenge 
in November 1989 elections by win of mayorship of Montevideo 
by Broad Front (Frente Amplio), a leftist coalition. Other parties 
in 1989 elections included various factions of Colorado Party and 
National Party and new left-of-center, social democratic coalition, 
New Sector (Nuevo Espacio). 

International Relations: Guided historically by principles of non- 
intervention, respect for national sovereignty, and reliance on rule 
of law to settle disputes. Traditionally an active participant in inter- 
national and regional organizations. During 1973-85 period of mili- 
tary rule, "military diplomacy" focused on national and regional 
subversion and geopolitical concerns. Sanguinetti renewed rela- 
tions with Cuba, Nicaragua, and China and strengthened relations 
with Soviet Union. Excellent bilateral relations with United States 
during 1985-90 period. Lacalle continued traditional guidelines 



xix 



of Uruguayan foreign policy and placed emphasis on regional in- 
tegration, especially with Argentina and Brazil. Although some- 
what ambivalent toward United States policy on drug trafficking, 
Lacalle strongly endorsed President George H.W. Bush's free- trade 
Enterprise for the Americas Initiative of June 1990. 

International Agreements and Memberships: Member of at least 
thirty- two international organizations, including Organization of 
American States, United Nations and most of its specialized agen- 
cies, World Bank (see Glossary), International Monetary Fund 
(IMF — see Glossary), General Agreement on Tariffs and Trade, 
International Telecommunications Satellite Organization, Latin 
American Economic System, and Latin American Integration As- 
sociation. Signatory of Inter- American Treaty of Reciprocal As- 
sistance (Rio Treaty), Treaty for the Prohibition of Nuclear 
Weapons in Latin America (Tlatelolco Treaty), and Rio de la Plata 
Basin Treaty. 

National Security 

Armed Forces: Total strength in 1991 estimated at 22,900: army, 
16,000; navy, 3,500; and air force, 3,400. 

Organization: Country divided into four military regions head- 
quartered in Montevideo (I), San Jose (II), Paso de los Toros (III), 
and Maldonado (IV). Each military region headquarters hosted 
one of four administrative army corps headquarters. Montevideo's 
First Corps traditionally most powerful of army's main command 
elements. Army had one independent infantry brigade, fifteen in- 
fantry battalions, six engineer battalions, six artillery battalions, 
and ten cavalry battalions. Navy organized into one fleet command 
divided into one escort division and one patrol division. Navy also 
commanded naval air, coast guard, marines, and National Mari- 
time Police. Air force organized into tactical, training, and materiel 
commands, principally Tactical Air Command. 

Equipment: Services had mosdy obsolete United States equipment 
in 1991. Army had sixty-seven United States-made light tanks; ar- 
mored vehicles from Belgium, Brazil, United States, and Federal 
Republic of Germany (West Germany); and Swedish-, Argentine-, 
and United States-made artillery pieces. Navy's former United 
States equipment included one frigate, one destroyer escort, one cor- 
vette, and two large patrol craft. French-made equipment included 
three frigates and three large patrol craft. Fleet included one 
minesweeper, five amphibious landing craft, and one training ves- 
sel. Air force had thirty-three combat aircraft (seven of them trainers). 



xx 



Police: Total strength in 1990 estimated at 17,500. About 40 per- 
cent of police assigned to urban areas (with at least 20 percent in 
Montevideo). National Police subordinate to Ministry of the 
Interior and organized into four operating agencies: Montevideo 
Police, Interior Police, National Traffic Police, and National Corps 
of Firemen. Two police paramilitary organizations — Republican 
Guard and Metropolitan Guard — assigned to capital area for 
ceremonial and guard or riot-control duties, respectively. 



xxi 



30 



J 



ARGENTINA; ! 



Artigasg, 



BRAZIL 



ART I GAS 



V. 



T 

54 

International boundary 

Department boundary 

® National capital 

® Department capital 



30- 



25 50 Kilometers 



j Salto 

J 



SALTO 



■jim Rivera ^ 

fx ^ 
\ RIVERA 



25 50 Miles 

'Claimed by Argentina and Uruguay 



V 



\ Tacuarembo 



' ^/l 



I 



BRAZIL 



PAYSANDU 



( 



32 



^_ Paysandu 



/ TACUAREMBO /"" 

/ 



Fray 



Umbatse M 



Melo 




RIO NEGRO 

j Mercedes 
® f k - Durazno 

Trinidad^rS^\^.s ' 

SORIANO •>) ® 



CERRO LARGO 



^.f ^ 



DURAZNO 



TREINTA Y TRES, 



Jreinta r -^\j 



r 



c 



v 



.FLORES^ FinR , nA \ \ 

^ \ ^.j FLOT/D ^ Uavalleja rocha 

\ ? ' '. .Florida / r J\ C)t 34- 

\l COLON I A \,nco 9 f * • 

VX ^ JOSE \ .— t ) ( 

\ \ Co/on/a i f - \ w W/na S y j | 

isia Martin^X^ — ^ n J°seY Canelones) .s • » 

(*&tu& ^-^s^v \MALDONADO^ % f TL&m'<nC 

Montevideo Maldonadcr OC£%$l 

ARGENTINA 

§3 \ boundary representation 



Figure 1. Administrative Divisions of Uruguay, 1990 



xxii 



Introduction 



URUGUAY USED TO BE KNOWN as the "Switzerland of 
South America," but clearly not because of any geographical 
similarity. Although it is the second smallest republic in South 
America (after Suriname), Uruguay is more than four times larger 
than landlocked Switzerland, and its highest peak is only 501 meters. 
Rather, the analogy was made because Uruguay enjoyed other 
Swiss-like attributes. It was a peaceful, conservative country with 
a bountiful, livestock-based economy. It was also home to South 
America's first social democracy; a cradle- to- grave welfare system; 
and a largely urban, homogeneous, and relatively well-educated 
population. A political slogan of the 1940s proudly boasted, 
"There's no place like Uruguay." 

Beginning with the prolonged stagnation of their country's indus- 
trial and livestock sectors in the mid-1950s, however, Uruguayans 
began losing their economic well-being, civility, and tranquillity. 
By the late 1960s, Uruguay was suffering from high inflation and 
public deficits and was governed by an authoritarian president, 
instead of by the former revolving collegial executive (colegiado) that 
had been modeled on the Swiss system and designed to avoid a 
concentration of power. In 1973 Uruguayans also lost their cher- 
ished freedom and their democratic system when the country was 
plunged into one of Latin America's most repressive military dic- 
tatorships (1973-85). The country's democratic system was not fully 
restored until 1990. 

Having fallen far behind many countries economically, Uru- 
guayans could only reminisce about their former welfare state. In 
a discussion of Uruguay's global ranking, the late political scien- 
tist and Uruguay specialist Charles Guy Gillespie noted that "Uru- 
guayan society in 1990 presented a rather contradictory picture 
of advanced social indicators and declining economic status." Since 
Gillespie's research was completed, Uruguay has risen to be the 
highest ranking country in South America and Central America 
on the United Nations Development Programme's 1991 Human 
Development Index (HDI), a measure that combines per capita 
gross domestic product (GDP — see Glossary) with such factors as 
longevity and access to education. In world HDI ranking, however, 
Uruguay slipped from twenty-ninth place in 1990 to thirty-first place 
in the 1991 report. 

The assumption of the presidency by Luis Alberto Lacalle de 
Herrera in 1990 improved the country's political development index 



xxiii 



by marking the success of Uruguay's five-year transition back to 
democracy. Undeterred by their nation's serious economic 
problems, tens of thousands of the Uruguayans who had fled the 
country during the military regime returned home. Instead of the 
old Uruguay, however, they found their traditionally statist soci- 
ety undergoing privatization and sharp cutbacks in social services 
under the Lacalle government's plan to turn the nation into a South 
American ' * Singapore . ' ' 

Yet, unlike the Swiss, for whom modernization and traditional- 
ism were mutually compatible, Uruguayans in general were stub- 
bornly resistant to Lacalle 's vision of a free-market economy, which 
had been much talked about during the previous administration 
of Julio Maria Sanguinetti Cairolo (1985-90), and to changing their 
old ways, which still included horse-and-buggy milk deliveries in 
Montevideo. This predilection for traditionalism over modernism 
was explained in part by the fact that Uruguay, a country with 
a low birth rate and long life expectancy, had Latin America's old- 
est population. With a work force of 1 .4 million in 1990, Uruguay 
had 650,000 people receiving pensions. Another explanation was 
a general uncertainty as to whether modernization offered a bet- 
ter future. As Jorge Batlle Ibanez, a 1989 presidential candidate, 
explained in the weekly news magazine Busqueda: 

Uruguay is the most difficult country in Latin America to change 
because, being the smallest [sic] country, it lacks masses that could 
switch rapidly or violently from one side to the other, and it has 
a relatively prosperous middle class that feels there are few oppor- 
tunities for easily finding another destiny without losing what they 
already have. 

Nevertheless, the new destiny as a regional free- trade and finan- 
cial center envisioned for the nation by Lacalle seemed designed 
to make better use of the country's existing geographic and eco- 
nomic advantages, as well as its historical role as gatekeeper to the 
Rio de la Plata Basin trade region. 

Although not a maritime nation, Uruguay is surrounded on three 
sides by water. Three rivers (the Rio de la Plata, one of the widest 
rivers in the world; the Rio Uruguay; and the Rio Yaguaron), a 
lake (Laguna Merin), and the Atlantic Ocean border the country. 
The main port and capital city of Montevideo, founded in 1726, 
is situated on strategic trade routes. 

Even the name of Uruguay, first applied to the Rio Uruguay, 
has river-related origins. Its etymology derives from either urugua, 
a Guarani Indian word meaning a species of mussel, thus Rio 



xxiv 



Uruguay, "the river of shellfish"; or the Guaram word compo- 
nents uru (a kind of bird that lived near the river); gua ("to pro- 
ceed from"); and^> ("water"). 

Uruguay also has long been associated with cattle and sheep and 
the gauchos who have herded them, as well as with verdant grass- 
lands. The country's traditional beef and wool exports have been 
well known in world markets. A land of gentle hills and rolling 
plateau covered by tall prairie grass, Uruguay has been often 
referred to in travel books as "the purple land" since the publica- 
tion in 1885 of a book by British naturalist and travel writer W.H. 
Hudson. In addition to the purple verbena wildflowers (margari- 
tas) that populate the grasslands from December through March, 
the red sandstone in the northern area has a faint purplish hue. 

When discovered by Spanish conquistador Juan Diaz de Solis 
in 1516, the Rio de la Plata region was inhabited only by fierce 
Charrua and Guaram Indians and an enormous wildlife population, 
including ostrich-like birds called rheas. The region disappointed 
Spaniards in search of gold and silver riches. As a consequence, 
the first Spanish settlement, in Soriano at the mouth of the Rio 
Negro in the southwest, was not established until 1624, after the 
gold fever had cooled. Unlike elsewhere in Latin America, the na- 
tive population, which remained hostile to settlers, was left rela- 
tively undisturbed, at least until the beginning of the seventeenth 
century. 

Jesuit and Franciscan missionaries proselytized among the In- 
dians, but with limited success. Most of the Indians in fact remained 
hostile and eventually perished in battles with Spanish and Por- 
tuguese forces (but not, as in other places in the Americas, in work- 
ing the land or mines as serfs). Because the native population was 
relatively small and so few Indians survived (the last Charrua In- 
dian died in 1948), present-day Uruguay, unlike most Latin Ameri- 
can countries, has only an 8 percent mestizo presence. 

With the separation of their thrones in the mid- seventeenth cen- 
tury after sixty years of joint rule, Spain and Portugal began an 
intense rivalry for control of the Rio de la Plata region, mainly 
because of its strategic trade location. From 1680, when the Por- 
tuguese established their first settlement at Colonia del Sacramen- 
to, to 1827, the forces of Spain and Portugal fought over the region 
known as the Banda Oriental (eastern side, or bank), the fertile 
plain east of the Rio Uruguay that would later become known as 
Uruguay. 

Much of Uruguay's nineteenth-century history featured an end- 
less succession of invasions, coups, dictatorships, and civil wars. 
However, the half-year-long occupation of Montevideo by British 



XXV 



forces in 1807, followed by an invasion of British merchants, left 
the city with an enduring cultural legacy. It included the coun- 
try's first printing press and an English/Spanish weekly newspaper, 
The Southern Star/La Estrella del Sur, which introduced Montevideans 
to British democracy and strengthened a desire among them for 
self-government and independence from Spain. Accordingly, their 
resentment of being subordinate to the viceroyalty capital of Buenos 
Aires grew. 

The nine-year campaign (1811-20) by Jose Gervasio Artigas to 
take control of Montevideo successively from the Spanish, the 
Argentines, and the Portuguese engendered a new sense of nation- 
ality among the residents of the Banda Oriental. The announce- 
ment by the Portuguese in 1821 that Brazil was annexing the Banda 
Oriental and renaming it the Cisplatine Province prompted Juan 
Antonio Lavalleja to launch a guerrilla war against Brazilian forces. 
Lavalleja and his fellow revolutionaries (later called the Thirty- 
Three Heroes), assisted by Argentine troops, sparked a countrywide 
insurgency that escalated into a war between Argentina and Brazil 
(1825-28). Aided by Britain's mediation, both Argentina and Brazil 
renounced their claims to the Banda Oriental, at least in theory, 
and the Oriental Republic of Uruguay (Republica Oriental del Uru- 
guay) became officially independent on August 27, 1828. Uruguay 
was the last nation in South America to be created from the Span- 
ish colonies. 

The new nation's first constitution, a liberal document, was 
adopted on July 18, 1830, and would remain unchanged for eighty- 
seven years. Shortly after its adoption, Uruguay's two main political 
parties — the Colorado Party (Partido Colorado) and the National 
Party (Partido Nacional, usually referred to as the Blancos) — 
emerged from armed clashes. The Colorado Party was composed 
of Montevideo-based middle-class liberals, whereas the National 
Party was made up of rural-based conservative landowners and 
merchants. Their mutual hostility erupted into the Great War 
(Guerra Grande, 1843-52), in which Colorado-held Montevideo 
was once again besieged in another nine-year war, this time in- 
volving Uruguayan, Argentine, Brazilian, French, British, and 
Italian forces (including Italian patriot Giuseppe Garibaldi). Fol- 
lowing the war, which was economically disastrous for Uruguay, 
a policy of fusion (fusion), in which the Colorado and National par- 
ties agreed to cooperate, created the political framework and sta- 
bility that were conducive to economic recovery and growth. 

The fusion policy was cast aside with the onset of the War of 
the Triple Alliance (1865-70), in which Colorado-ruled Uruguay 
was, ironically, an ally of Argentina and Brazil against hopelessly 



xxvi 



outmatched Paraguay. The war ended armed foreign intervention 
in Uruguayan affairs, but fighting between the gaucho forces of 
the ruling Colorados and the opposition Blancos resumed. In 1872, 
however, the two parties reached an accord under which the Na- 
tional Party was given control of four of the country's departments, 
but the Colorado Party remained in power. This new policy of 
coparticipation (coparticipaciori) represented a compromise between 
the two parties and was a policy that would continue in Uruguayan 
politics. A political watershed in Uruguay's struggle for stability 
was another interparty accord reached in 1897, following a civil 
war, under which all citizens were guaranteed political rights and 
the National Party increased the number of departments under its 
control to six. 

In the last quarter of the nineteenth century, heavy immigra- 
tion from Europe, either directly or by way of Argentina or Brazil, 
propelled social and political changes, and Uruguay made progress 
toward becoming a more stable and peaceful state. By 1872 one- 
fourth of the population was foreign born and by 1900, one-third. 
The European immigration produced an urban and secular soci- 
ety that was largely middle class, with European values. The north- 
ern European immigrants tended to be of middle-class origin, 
whereas the predominant Spaniards and Italians were more often 
of working-class origin. 

Uruguay adopted free, compulsory, and secular education in 
1876, thanks to the efforts of educator Jose Pedro Varela (presi- 
dent, 1875-76), who was influenced by Horace Mann of the United 
States. Varela lived only thirty-five years, but his basic principles 
of education, which were incorporated into the 1877 Law of Com- 
mon Education, have endured, allowing Uruguay to become one 
of the most literate of Latin American nations. 

The foundations of the modern state and of the governmental 
institutions and political traditions were laid in the first two de- 
cades of the twentieth century, but particularly during the second 
presidential term of the Colorado Party's Jose Batlle y Ordonez 
(1903-07, 1911-15). Under Batlle y Ordonez's influence, Uruguay 
implemented even more profound social reforms — becoming Latin 
America's first country to adopt a minimum wage scale for its 
agricultural workers, obligatory voting, and women's suffrage — 
and became a stable social democracy modeled on the Swiss sys- 
tem, which Batlle y Ordonez had studied in Switzerland between 
terms. Batlle y Ordonez also instituted a Swiss-style presidency 
designed to prevent dictatorships. Under it, the nine members of 
the National Council of Administration (Consejo Nacional de 
Administracion), or collegial executive (colegiado), rotated the 



xxvn 



presidency for one-year terms. Batlle y Ordonez's new executive 
system and social reforms were adopted in the 1917 constitution. 

With revenue generated from their country's vast wool and beef 
exports, Uruguayans enjoyed Latin America's highest standard of 
living, which included free public education through the univer- 
sity level, expanded public-sector employment, and a generous so- 
cial welfare system that permitted people (with the exception of 
the rural poor) to retire in middle age. Uruguay was so prosper- 
ous that in 1920 it forgave France a US$100 million debt. 

The "welfare state" system limited the appeal of revolutionary 
ideologies and parties by co-opting their programs, minimizing so- 
cial and economic stratification, and giving the majority of the popu- 
lation a stake in the existing order. These and other factors, such 
as racial and ethnic homogeneity and the high level of mobility 
within the predominantly middle-class social structure, all contrib- 
uted to the relative stability of the country's democratic system. 
Uruguay ranked with Chile and Costa Rica as one of the most stable 
democracies in Latin America, although it, like most countries, 
suffered from the Great Depression. Uruguay was subjected to dic- 
tatorial rule only once during the first half of the twentieth cen- 
tury (1933-38). Even then, the ad hoc regime was headed by a 
civilian, Gabriel Terra, who had been elected president, at least 
initially. Moreover, Terra preserved the country's social reforms. 

Uruguay enjoyed a boom in wool and meat exports during World 
War II and the Korean War. Unlike Argentina, it sided with the 
Allies during World War II and hosted United States air and naval 
bases. Economic stagnation and decline, however, followed the post- 
Korean War drop in world demand for livestock products. Pres- 
sures created by those developments — combined with growing 
political lethargy, sectarianism, and governmental inefficiency and 
corruption — unraveled the nation's delicate social fabric and 
precipitated rising levels of class conflict. In the second half of the 
1960s, Uruguay was racked by continual labor militancy and urban 
terrorism by the National Liberation Movement-Tupamaros 
(Movimiento de Liberacion Nacional-Tupamaros — MLN-T) that 
propelled the military increasingly into the political arena. 

Jorge Pacheco Areco (1967-72) and Juan Maria Bordaberry 
Arocena (1972-76), both members of the Colorado Party, governed 
under increasingly frequent states of siege and allowed the mili- 
tary to pursue its national security goals without regard for con- 
stitutional safeguards or laws. Put in charge of fighting the 
Tupamaros in late 1971, the armed forces defeated the urban guer- 
rillas within six months. Nevertheless, repression continued, and 
the military assumed a greater political role, in effect making 



xxviii 



Bordaberry little more than a figurehead president. Opposing these 
Colorado Party regimes were the National Party and the newly 
formed Broad Front (Frente Amplio), a coalition of disaffected 
Colorados, socialists, communists, and other left-of-center parties. 

When the General Assembly (the legislature) resisted final ap- 
proval of draconian national security measures imposed by the mili- 
tary, Bordaberry abolished the General Assembly on June 27, 1973, 
thereby commencing the dictatorship. The regime prohibited all 
political party activity, suppressed the opposition press, disbanded 
the National Convention of Workers (Convention Nacional de 
Trabajadores — CNT) as well as all parties in the Broad Front, ar- 
rested left-of-center political and union leaders, and prohibited all 
labor union activities. In June 1976, after forcing Bordaberry to 
resign, the military assumed total control of the country. 

According to Amnesty International, a private human rights or- 
ganization, under the military regime Uruguay had the world's 
highest per capita ratio of political prisoners: one in every 500 
citizens. By 1980 many citizens had been detained and tortured 
at some point, and one in every 500 had received a sentence of 
six years or longer. Between 300,000 and 400,000 Uruguayans went 
into exile. 

Fortunately for Uruguayan democracy, the military's attempt 
to institutionalize its rule by submitting its proposed constitutional 
reform to a national referendum in November 1980 backfired. By 
a vote of 57 percent to 43 percent, Uruguayans rejected the pro- 
posed national security state. As a result, Lieutenant General (re- 
tired) Gregorio Alvarez Armelino (1981-85) was obliged to transfer 
power to an elected civilian, Julio Maria Sanguinetti. 

During the first half of the Sanguinetti administration, Uruguay 
became an atypical island of economic stability and, thanks to a 
deregulated financial system, a refuge for capital fleeing Argen- 
tina and Brazil. Although Uruguay bore a heavy foreign debt load, 
it never stopped paying on its debt. Uruguay also had important 
gold reserves, one of the largest in proportion to its indebtedness 
and economic potential. During the final two years of Sanguinetti 's 
administration, however, the economy suffered a downturn. In 1989 
inflation had increased to 85 percent, the foreign debt to US$6.7 
billion, and the fiscal deficit to 8.5 percent of GDP, and the pur- 
chasing power of salaries had fallen. 

During Sanguinetti 's administration, Uruguay, like other Latin 
American countries undergoing a transition from military dictator- 
ship to democracy, found itself confronted with the dilemma of hav- 
ing to decide between prosecuting military officers for crimes 
committed during the period of military rule, and thereby risk 



xxix 



antagonizing civil-military relations, or granting them a blanket 
amnesty. Sanguinetti had noted that every conflict in Uruguayan 
history was followed by a generous amnesty law. Nevertheless, a 
1986 law granting amnesty to the military was so controversial that 
a national referendum on the issue had to be held. In a 1989 referen- 
dum, a majority of the population upheld the law exempting mili- 
tary officers from human rights prosecutions. 

Thus, Lacalle was spared from having to contend with the am- 
nesty issue after assuming office as Uruguay's president. Yet, he 
quickly caused grumbling within the armed forces by asserting his 
presidential prerogative and naming two trusted officers to head 
the navy and air force, thereby sidestepping the order of military 
seniority. The military was already unhappy with its shrinking size 
and the reduction in the military budget during the Sanguinetti 
administration. 

Although the military reaffirmed its subservience to the nation's 
democracy, Lacalle ordered the Ministry of National Defense in 
May 1990 to formulate a new armed forces doctrine "within the 
framework of the Constitution and current laws." The guidelines 
were to restrict its scope of action by excluding the military from 
responding to ordinary internal conflicts that came within the sphere 
of the police. Nevertheless, Army Commander Lieutenant General 
Guillermo de Nava raised concerns among Uruguayan politicians 
because of his public endorsement of a retired general's statements 
in April 1991 warning of a comeback by the Tupamaros and the 
Communist Party of Uruguay and calling for Uruguayan society 
to be placed on a "red alert." 

Lacalle also embarked on an austere economic adjustment pro- 
gram that had two main components: a reduction in public spending 
and the inflation rate, as well as an increase in certain taxes. He 
succeeded in his first year in office in cutting spending by 10 per- 
cent and increasing revenue by 9 percent. Nevertheless, real wages 
in the public sector fell by 9 percent and in the private sector, by 
6 percent; GDP growth in 1990 was negligible; and inflation reached 
129 percent by year's end. 

The popularity of the Blancos plummeted from about 38 per- 
cent at the time of the 1989 election to 21 percent in December 
1990, according to a public opinion poll published by Busqueda. 
Lacalle at least shared company with the Marxist mayor of Monte- 
video, the Broad Front's Tabare Vazquez, whose popularity fell 
from 35 to 30 percent; national support for the Broad Front slipped 
from 26 to 24 percent. Essentially, in the wake of the 1989 elec- 
tions the two traditional parties no longer dominated Uruguay, and 
Montevideo in particular. (Vazquez even assumed a diplomatic 



xxx 



role by paying a five-day visit to Cuba in June 1991 and signing 
a five-year agreement of intent for bilateral cooperation with 
Havana.) 

Lacking a parliamentary majority, Lacalle formed a governing 
coalition, National Coincidence (Coincidencia Nacional), with the 
Colorados but encountered strong resistance to his proposed aus- 
terity and privatization programs. Labor union opposition to these 
plans and support of wage claims increased during 1 99 1 , taking 
the form of work stoppages, slowdowns, and, in May, a one-day 
general strike (the third since Lacalle took office). Instead of using 
the unpopular term privatization to describe his economic policy 
agenda, Lacalle called instead for a redefinition of the role of the 
state, deregulation, and elimination of monopolies. 

In the first of a number of proposed privatizations (which in- 
cluded the telephone company, the state airline, and state monopo- 
lies on insurance, port services, and production of alcohol), the 
government sold the state-owned Commercial Bank (Banco Com- 
mercial) in July 1990 to a group of international investors. They 
and other multinational investors regarded Uruguay as an increas- 
ingly important regional financial market because of its liberal for- 
eign investment exchange and banking regulations, strategic 
location, stable political climate, and relatively predictable economic 
policies. 

Like Switzerland, Uruguay in 1990 continued to serve as an in- 
ternational meeting place and a banking center. Uruguay has long 
been known as a location for international economic conferences. 
The eleven-member Latin American Integration Association 
(Asociacion Latinoamericana de Integration — ALADI; see Glos- 
sary) has been headquartered in Montevideo since its inception 
in 1980. For many of the West's economists, in the early 1990s 
the word Uruguay was synonymous with the Uruguay Round of 
negotiations of the General Agreement on Tariffs and Trade 
(GATT — see Glossary). International meetings often have been 
held in Punta del Este, a popular resort city. 

Aided by its bank secrecy laws first implemented by the mili- 
tary regime in the early 1980s, Uruguay built up its offshore banking 
system beginning in 1989. A negative outgrowth of this was the 
nation's growing reputation as a center for money laundering; such 
activity increased dramatically in Uruguay after Colombian drug 
traffickers abandoned Panama following the United States mili- 
tary intervention in December 1 989 . According to a document is- 
sued by the United States Department of State in April 1991, 
Uruguay continued to be a "significant" center for money laun- 
dering because of its free-trade system, the large number of currency 



xxxi 



exchange houses (more than seventy in Montevideo), and the ab- 
sence of government regulation of the operation and movement 
of funds. In May 1991 , Uruguay and the United States signed an 
agreement, which was similar to one signed between Switzerland 
and the United States that year, to facilitate joint action against 
money laundering operations by drug smugglers. The accord had 
not yet gone into effect as of mid-July 1991, pending ratification 
by the legislatures of both countries. 

Most Uruguayans were more concerned with their own bank 
accounts than with those of foreign drug traffickers. Lacalle did 
not improve his standing in the popularity polls by introducing * 'un- 
pleasant" economic measures in his speech on his first anniver- 
sary in office. He also warned the General Assembly that unless 
it reformed the social security system by curbing its generous 
benefits (already cut by 17.4 percent in 1990), his savings in con- 
trolling public expenditures would be lost. Although Uruguay sup- 
ported the world embargo against Iraq, its effects were, in Lacalle 's 
words, "particularly painful" for Uruguay because of lost mut- 
ton exports to Iraq and higher oil import costs. 

On March 26, 1991, Uruguay sought to revive its export sector 
by signing, along with Argentina, Brazil, and Paraguay, the Treaty 
of Asuncion, a pact that created the Southern Cone Common Mar- 
ket (Mercado Comun del Sur — Mercosur). Mercosur, which was 
scheduled to go into effect on January 1 , 1995 (a member, however, 
could decide to drop out before then), was the goal of various re- 
gional integration agreements, such as the River Transport Sys- 
tem, consisting of the Rio Paraguay-Rio Parana-Rio Uruguay 
waterway. 

Mercosur was formed in part in response to President George 
H.W. Bush's June 1990 Enterprise for the Americas Initiative (see 
Glossary). The Mercosur nations and the United States signed a 
letter of intent on June 19, 1991, that could eventually lead to a 
free-trade pact modeled on the Mexico-United States accord. 
However, serious obstacles to a free-trade pact between the United 
States and the Mercosur nations remained, such as a collective 
US$200 billion foreign debt and persistent regional trade barriers. 

Although Uruguay's Senate ratified the country's participation 
in Mercosur, the nation's initial enthusiasm soon waned. Uru- 
guayan business and agricultural organizations were concerned that 
neighboring giants, particularly Brazil, would only take advantage 
of lower Uruguayan tariffs to increase competition. In an inter- 
view with the Buenos Aires daily El Clarin in late June 1991 , Lacalle 
said, somewhat optimistically, that Uruguayan businessmen were 



xxxii 



viewing Mercosur not with resistance but with feelings of "caution, 
a reasonable expectation, a desire for a smooth transition period." 

Of course, the emergence of Mercosur and the prospect of a free- 
trade agreement with the United States were anathema to the Uru- 
guayan left. The Broad Front also feared proposed military cooper- 
ation within Mercosur, arguing that Uruguay could become a pawn 
of Argentina and Brazil. In any event, Montevideo, in its grow- 
ing capacity as a regional financial and banking services center and 
potential hub of free trade — despite its Marxist mayor — seemed 
in July 1991 to be moving closer, if reluctantly, to becoming what 
Lacalle envisioned as the "gateway" to Mercosur. 

July 16, 1991 

* * * 

In 1992 Mercosur continued to be President Lacalle' s main in- 
strument for ensuring that competition came to his country. Aided 
by events in Eastern Europe, Lacalle 's tariff-free trading vision 
of Uruguay's future found greater receptivity among Uruguayans 
to free-market reforms and smaller government. Nevertheless, 
resistance to the Lacalle government's attempts to restructure the 
state sector remained substantial. Uruguayan businessmen wor- 
ried that Argentine and Brazilian industries would devour them. 
According to a poll taken in February 1992, about 54 percent of 
the Uruguayans who were queried opposed the privatization policy. 

With only thirty-nine seats in the Chamber of Representatives, 
the Lacalle government was forced to negotiate support for each 
of its initiatives with the Colorado Party (thirty seats), Broad Front 
(twenty-one seats), and New Sector (Nuevo Espacio; nine seats). 
Consequendy, it was not until September 1991, by which time 
Lacalle 's popularity had fallen to 1 1 percent, that the General As- 
sembly narrowly approved his privatization law (the Public Com- 
panies Law), after eighteen months of drafting it and four months 
of debating it. This law allowed private entrepreneurs to compete 
in a bidding system for the right to privatize public services. 

Reflecting growing opposition to his economic policy of auster- 
ity and privatization, Lacalle 's National Coincidence alliance and 
his narrow parliamentary majority collapsed by early 1992. At the 
end of January 1992, Lacalle had to call for the resignation of his 
cabinet ministers, who were then "provisionally ratified." By that 
April, dissent had emerged even within the ruling National Party, 
with two factions opposing the strong tightening of workers' salar- 
ies, which had particularly affected state workers. One of these 



xxxiii 



factions, calling itself the Progressive Pole (Polo Progresista) and 
supported by several prominent Blancos, including Senator Alberto 
Saenz de Zumaran, launched itself as a new party on May 10. 

Opposition to Lacalle's new law focused on the major privati- 
zations planned for Uruguayan National Airlines (Primeras Lfneas 
Uruguayas de Navegacion Aerea — PLUNA), the National Ad- 
ministration for the Generation and Transmission of Electricity 
(Administracion Nacional de Usinas y Transmisiones Electricas — 
UTE), and the National Administration of Fuels, Alcohol, and Port- 
land Cement (Administracion Nacional de Combustibles, Alco- 
hol, y Portland — ANCAP). So-called peripheral divestments 
included the National Printing Press (Imprensa Nacional), hospi- 
tal services, administration of air terminals and three port termi- 
nals, and agricultural development facilities. Confrontations were 
imminent within these and other state enterprises, which operated 
as autonomous entities (autonomous agencies or state enterprises; 
see Glossary) run by five-member executive boards in which three 
were progovernment party members and two were opposition party 
members. The opposition Colorado Party members were expected 
to ally themselves with the National Party members opposed to 
the government's economic policy. 

The government's salary measure, which prompted the sixth 
general strike against the government, was implemented as a result 
of an agreement with the International Monetary Fund (IMF — 
see Glossary) to unfreeze some US$300 million in credits to be used 
for repaying the US$7.4 billion foreign debt, which grew by US$405 
million in the Lacalle administration's first two years. 

In a few other areas, Uruguay made some good economic 
progress in 1991 . Buoyed by 850,000 tourists plus internal demand 
(both consumption and investment), the country enjoyed robust 
growth during the year. Inflation was at least 90 percent, as com- 
pared with 129 percent in 1990. 

However, other economic and social problems worsened. In ad- 
dition to the increase in trade union conflicts, unemployment rose 
from 8.4 percent in January 1991 to 9.2 percent at the end of 1991, 
and GDP grew by at best 0.5 percent in 1991, as compared with 
0.9 percent in 1990. Moreover, according to a report by the General 
Directorate of Statistics and Census based on a household survey, 
15.8 percent of all Uruguayan families were living in a state of 
"critical poverty" in 1991 (as compared with 11 percent in 1981), 
while 22.3 percent lacked one or more basic needs, such as hous- 
ing, water supply, sanitation, education, or a living wage. 

Meanwhile, middle-class Uruguayans and the political system 
were resisting Lacalle's proposals to restructure the old welfare 



xxxiv 



system, such as a proposal to raise the qualifying age for retire- 
ment pensions — fifty-five years of age for women and sixty for 
men — by five years. In his speech to the nation on May 26, 1992, 
Lacalle pointed out that the country's social security bill had risen 
from US$718 million in 1985 to US$1.1 billion in 1991, creating 
an ever- widening deficit. 

Ironically, the country was enjoying a bout of euphoria over the 
startling discovery of a gold-laden Spanish galleon, El Preciado, that 
sank eight kilometers from the Montevideo harbor in June 1792. 
Many Uruguayans, including some politicians and government offi- 
cials, anticipated a windfall that could be used for social services 
from the treasure and from as many as seven other sunken ships 
known to be in the area with large amounts of gold. Based on the 
amount of gold already recovered, the El Preciado booty was esti- 
mated to be worth from US$300 million to US$3 billion. 

In contrast to the plunging popularity of Lacalle and his National 
Party, the popularity rating of Montevideo's leftist mayor, Tabare 
Vazquez, soared to 53 percent in September 1991, increasing the 
Broad Front's confidence of victory in the 1994 elections. By Novem- 
ber 1991, the Broad Front's popularity had risen to 24 percent, mak- 
ing it the second most popular party after the Colorado Party, which 
had a 41 percent popularity rating (the National Party was supported 
by only 19 percent of those surveyed in an April 1992 poll). Taking 
a cue from events in the former Soviet Union, the Broad Front offi- 
cially abandoned its commitment to Marxist- Leninist principles. 

In April 1992, however, the Broad Front's most radical mem- 
ber, the Uruguayan Revolutionary Movement (Movimiento Revo- 
lucionario Oriental — MRO), stepped back into an earlier, dark 
era by endorsing "an armed struggle strategy." That approach 
was also adopted by a self-styled right-wing paramilitary group 
linked to military officers and called the Juan Antonio Lavalleja 
Command (Comando Juan Antonio Lavalleja), which launched 
a series of bombings, including one against Sanguinetti's office, 
and bomb threats in May. The resulting climate of fear and 
restlessness, which had characterized the early 1970s, seemed 
anachronistic in the Uruguay of the 1990s, where democracy sup- 
posedly had been consolidated. The military-linked terrorism and 
the public remarks made by some retired military officers reveal- 
ing sentiment in favor of a coup also seemed to reflect growing 
military uneasiness over the prospects of a Broad Front electoral 
victory in 1994. 



June 4, 1992 Rex A. Hudson 



XXXV 



Chapter 1. Historical Setting 



Jose Gervasio Artigas, leader of the independence movement 



WHEN SPANIARDS DISCOVERED the territory of present- 
day Uruguay in 1516, they found only a rolling prairie populated 
by groups of Indians living in primitive conditions. When con- 
fronted by the Spaniards, the Indians fiercely defended their free- 
dom and their independent way of life. Their continued ferocious 
resistance to Spanish conquest, combined with the absence of gold 
and silver, discouraged settlement in this region during the six- 
teenth and early seventeenth centuries. Colonization by Spain began 
to increase, however, when Portugal showed an interest in expand- 
ing Brazil's frontiers to the Rio de la Plata Estuary in the late seven- 
teenth century (see fig. 1). Indeed, the early history of Uruguay 
is dominated by the struggle between Spain and Portugal and then 
between Brazil and Argentina for control of the Banda Oriental 
(as Uruguay was then known), the eastern side, or bank, so called 
because the territory lies to the east of the Rio Uruguay, which 
forms the border with Argentina and flows into the Rio de la Plata. 

The conquistadors imported cattle, which were well suited to 
the region, with its abundant pastureland, temperate climate, and 
ample water supply. Cattle soon became the main source of wealth 
and consequently the main attraction of the region, and the terri- 
tory was opened up by hardy pioneers and gauchos, or cow- 
boys, whose wide-ranging way of life contributed in no small part 
to the spirit of independence that has long characterized Uruguay. 
Montevideo was founded by the Spanish in the early eighteenth 
century as a military stronghold. The Spanish fleet used its natu- 
ral harbor, which soon developed into a commercial center com- 
peting with Buenos Aires, the Argentine capital established on the 
opposite shore of the Rio de la Plata. 

The move to independence began, as elsewhere in Latin America, 
in the early nineteenth century. Uruguay's revolt against Spain 
was initiated in 1811 by Jose Gervasio Artigas, a gaucho chieftain 
who became a hero of the independence movement. Artigas is 
known to Uruguayans as the father of Uruguayan independence, 
although his attempt to gain autonomy for the country within the 
boundaries of a regional federation was unsuccessful. Independence 
was not finally and formally achieved until 1828, following a war 
between Brazil and Uruguayan patriots supported by Argentina. 
British diplomatic mediation ended the conflict and resulted in 
the recognition of the Oriental Republic of Uruguay (Republica 
Oriental del Uruguay) as an independent state. Nevertheless, civil 



3 



Uruguay: A Country Study 



wars, invasions, and foreign intervention continued to disrupt the 
nation's development until the end of the nineteenth century. 

The two political parties that have dominated Uruguayan polit- 
ical life since independence were born in these early years of insta- 
bility, although at that time they were litde more than feuding bands 
of gauchos. The issue that provoked the initial major confronta- 
tion was federalism versus unitary rule. In 1838 the federalist sym- 
pathies of General Manuel Oribe (president, 1835-38) led to a revolt 
by the forces of General Jose Fructoso Rivera (president, 1830-35), 
who again became president following the defeat of Oribe and his 
followers. Oribe 's forces, supported by merchants, landowners, and 
the high clergy, became known as Blancos in reference to the white 
{bianco) hatbands they wore to distinguish their own men from the 
enemy on the field of battle. Rivera's forces, representing more 
liberal urban elements, were distinguished by red (Colorado) hat- 
bands and thus were designated Colorados. The political lines 
drawn in the 1830s evolved into two rival parties: the Colorado 
Party (Partido Colorado), which identified itself as the defender 
of Uruguayan sovereignty and as the champion of the common 
man and liberalism, and the National Party (Partido Nacional, 
usually referred to as the Blancos), which stood for order and con- 
servatism and declared itself protector of the faith. 

During the last three decades of the nineteenth century, a period 
that included fifteen years of military rule, there were frequent con- 
frontations and clashes between the Colorados and the Blancos and 
among competing rival factions of the Colorados. A growing gulf 
between the capital city and the interior contributed to a solidifi- 
cation of the previously somewhat amorphous ideologies of the two 
parties as the Colorados recruited urban immigrant groups, espe- 
cially laborers, and the Blancos represented more conservative rural 
elements. 

Political stability came about in the first two decades of the twen- 
tieth century largely through the efforts of the dominant figure in 
the Colorado Party. Jose Batlle y Ordonez (president, 1903-07, 
1911-15) brilliantly promoted the social, economic, and political 
modernization of the country until his death in 1929, guiding a 
social transformation that reordered virtually every aspect of 
national life. His programs included the establishment of a com- 
prehensive social welfare program, the encouragement of domes- 
tic industry, the improvement of working conditions, the expansion 
of education, and the separation of church and state. 

Batlle y Ordonez's Colorado successors did not uniformly or 
consistently share his commitment to economic and social reform, 
but progress toward political, social, and economic modernization 



4 



Historical Setting 



nevertheless continued. Between 1946 and 1956, Luis Batlle Berres 
(president, 1947-51), a nephew of Batlle y Ordonez, was the lead- 
ing political figure. Espousing neo-Batllism, he attempted to fur- 
ther industrialize the economy, develop its agricultural sector, and 
expand the state apparatus, as well as to renew social progress. But 
the process came to a halt in the mid-1950s as a result of economic 
difficulties and ended with the triumph of the National Party (the 
Blancos) in 1958, after more than ninety years of Colorado gov- 
ernment. 

During the eight Blanco administrations (1958-67), instruments 
of state-directed economic policy were dismantled, relations with 
the International Monetary Fund (IMF — see Glossary) became 
closer, and the livestock sector became increasingly important. 
Nevertheless, the economic crisis continued, and political and 
social turbulence increased. Unions formed a centralized organi- 
zation in which the left had a dominant influence, and an urban 
guerrilla group, the National Liberation Movement-Tupamaros 
(Movimiento de Liberacion Nacional-Tupamaros — MLN-T) was 
formed. 

In 1967 the Colorados regained power, but President Jorge 
Pacheco Areco (1967-72) enforced a limited state of siege through- 
out most of his tenure. He applied a price- and wage-freeze policy 
to fight inflation, banned leftist groups, and called in the military 
to repress the Tupamaros, whose acts of urban terrorism posed 
a major national security threat. In 1972 Pacheco's successor, Presi- 
dent Juan Maria Bordaberry Arocena (1972-76), supported by the 
military, declared a state of "internal war," closed the General 
Assembly, persecuted the opposition, banned unions and leftist par- 
ties, and curtailed civil liberties. The military dictatorship that he 
instituted also implemented a neoliberal, monetarist, economic pol- 
icy that sought to reverse years of capital flight and economic stag- 
nation by increasing exports and controlling inflation. Although 
it scored some economic successes, the military suffered a defeat 
in 1980 after submitting an authoritarian constitution to a plebi- 
scite. From then on, civilian political leaders returned to the polit- 
ical scene, and in 1984 the majority of the political parties and the 
military agreed to call for elections in November 1985, thus allow- 
ing for a transition to democracy. 

From Pre-Columbian Times to the Conquest 

In contrast to most Latin American countries, no significant ves- 
tiges of civilizations existing prior to the arrival of European set- 
tlers were found in the territory of present-day Uruguay. Lithic 
remains dating back 10,000 years have been found in the north 



5 



Uruguay: A Country Study 



of the country. They belonged to the Catalan and Cuareim cul- 
tures, whose members were presumably hunters and gatherers. 

Other peoples arrived in the region 4,000 years ago. They be- 
longed to two groups, the Charrua and the Tupi-Guarani, classi- 
fied according to the linguistic family to which they belonged. 
Neither group evolved past the middle or upper Paleolithic level, 
which is characterized by an economy based on hunting, fishing, 
and gathering. Other, lesser indigenous groups in Uruguay included 
the Yaro, Chana, and Bohane. Presumably, the Chana reached 
lower Neolithic levels with agriculture and ceramics. 

In the early sixteenth century, Spanish seamen searched for the 
strait linking the Adantic and the Pacific oceans. Juan Diaz de Solis 
entered the Rio de la Plata by mistake in 1516 and thus discovered 
the region. Charrua Indians allegedly attacked the ship as soon 
as it arrived and killed everyone in the party except for one boy 
(who was rescued a dozen years later by Sebastian Cabot, an En- 
glishman in the service of Spain). Although historians currently 
believe that Diaz de Solis was actually killed by the Guarani, the 
"Charrua legend" has survived, and Uruguay has found in it a 
mythical past of bravery and rebellion in the face of oppression. 
The fierce Charrua would plague the Spanish settlers for the next 
300 years. 

In 1520 the Portuguese captain Ferdinand Magellan cast anchor 
in a bay of the Rio de la Plata at the site that would become Monte- 
video. Other expeditions reconnoitered the territory and its rivers. 
It was not until 1603 that Hernando Arias de Saavedra, the first 
Spanish governor of the Rio de la Plata region, discovered the rich 
pastures and introduced the first cattle and horses. Early colonizers 
were disappointed to find no gold or silver, but well-irrigated 
pastures in the area contributed to the quick reproduction of 
cattle — a different kind of wealth. English and Portuguese inhabi- 
tants of the region, however, initiated an indiscriminate slaughter 
of cattle to obtain leather. 

During the sixteenth and early seventeenth centuries, the Charrua 
learned the art of horsemanship from the Spaniards in adjacent 
areas, strengthening their ability to resist subjugation. The Indians 
were eventually subdued by the large influx of Argentines and 
Brazilians pursuing the herds of cattle and horses. Never exceed- 
ing 10,000 in number in eighteenth-century Uruguay, the Indians 
also lacked any economic significance to the Europeans because 
they usually did not produce for trade. As a result of genocide, 
imported disease, and even intermarriage, the number of Indians 
rapidly diminished, and by 1850 the pureblooded Indian had vir- 
tually ceased to exist. 



6 



Two gauchos in Tacuarembo Department 
Courtesy Inter-American Development Bank 

In 1680 the Portuguese, seeking to expand Brazil's frontier, 
founded Colonia del Sacramento on the Rio de la Plata, across from 
Buenos Aires. Forty years later, the Spanish monarch ordered the 
construction of Fuerte de San Jose, a military fort at present-day 
Montevideo, to resist this expansion. With the founding of San 
Felipe de Montevideo at this site in 1726, Montevideo became the 
port and station of the Spanish fleet in the South Atlantic. The 
new setdement included families from Buenos Aires and the Canary 
Islands to whom the Spanish crown distributed plots and farms 
and subsequently large haciendas in the interior. Authorities were 
appointed, and a cabildo (town council) was formed. 

Montevideo was on a bay with a natural harbor suitable for large 
oceangoing vessels, and this geographic advantage over Buenos 
Aires was at the base of the future rivalry between the two cities. 
The establishment of the Viceroyalty of the Rio de la Plata in 1776, 
with Buenos Aires as its capital, aggravated this rivalry (see fig. 2). 
Montevideo was authorized to trade directly with Spain instead 
of through Buenos Aires. 

Montevideo's role as a commercial center was bolstered when 
salted beef began to be used to feed ship crews and later slaves in 
Cuba. The city's commercial activity was expanded by the introduc- 
tion of the slave trade to the southern part of the continent because 



7 



Uruguay: A Country Study 

Montevideo was a major port of entry for slaves. Thousands of 
slaves were brought into Uruguay between the mid-eighteenth and 
the early nineteenth century, but the number was relatively low 
because the major economic activity — livestock raising — was not 
labor intensive and because labor requirements were met by in- 
creasing immigration from Europe. 

Throughout the eighteenth century, new settlements were estab- 
lished to consolidate the occupation of the territory, which con- 
stituted a natural buffer region separating Spanish from Portuguese 
possessions. To combat smuggling, protect ranchers, and contain 
Indians, the Spanish formed a rural patrol force called the Blanden- 
gues Corps. 

In late 1806, Britain, at war with Spain, invaded the Rio de la 
Plata Estuary to avenge Spain's recapture of Buenos Aires from 
the British. The 10,000-member British force captured Montevideo 
in early 1807 and occupied it until that July, when it left and moved 
against Buenos Aires, where it was soundly defeated. 

In 1808 Spanish prestige was weakened when Napoleon in- 
vaded Spain and installed his brother Joseph on the throne. The 
cabildo of Montevideo, however, created an autonomous junta that 
remained nominally loyal to Ferdinand VII as the king of Spain. 
Montevideo's military commander, Javier EHo, eventually per- 
suaded the Spanish central junta to accept his control at Montevideo 
as independent of Buenos Aires. In 1810 criollos (those born in 
America of Spanish parents) from Buenos Aires took the reins of 
government in that city and unseated the Spanish viceroy. The 
population of the Banda Oriental was politically divided. The coun- 
tryside favored recognizing Elio's junta in Buenos Aires; the au- 
thorities in Montevideo wanted to retain a nominal allegiance to 
the Spanish king. 

The Struggle for Independence; 1811-30 

Artigas's Revolution, 1811-20 

In February 1811, when EHo prepared to take the offensive 
against Buenos Aires, the interior of the Banda Oriental, led by 
Jose Gervasio Artigas, captain of the Blandengues Corps, rose in 
opposition to Elfo, and Artigas offered his services to Buenos Aires. 
Artigas, then forty- six years old, was the scion of a family that had 
settled in Montevideo in 1726. Influenced by federalism, Artigas 
had been dissatisfied with the administration of the former colo- 
nial government in Buenos Aires, particularly with its discrimina- 
tion against Montevideo in commercial affairs. Artigas's army won 
its most important victory against the Spaniards in the Battle of 



8 



Historical Setting 



Las Piedras on May 18, 1811. He then besieged Montevideo from 
May to October 1811. EKo saved Montevideo only by inviting in 
the Portuguese forces from Brazil, which poured into Uruguay and 
dominated most of the country by July 1811. That October Elio 
concluded a peace treaty with Buenos Aires that provided for the 
lifting of the siege of Montevideo and the withdrawal of all the troops 
of Artigas, Portugal, and Spain from Uruguay. Artigas, his 3,000 
troops, and 13,000 civilians evacuated Salto, on the Rio Uruguay, 
and crossed the river to the Argentine town of Ayuf, where they 
camped for several months. This trek is considered the first step 
in the formation of the Uruguayan nation. The Portuguese and 
Spanish troops did not withdraw until 1812. 

At the beginning of 1813, after Artigas had returned to the Banda 
Oriental, having emerged as a champion of federalism against the 
unitary centralism of Buenos Aires, the new government in Buenos 
Aires convened a constituent assembly. The Banda Oriental's 
delegates to elect assembly representatives gathered and, under 
instructions issued by Artigas, proposed a series of political direc- 
tives. Later known as the "Instructions of the Year Thirteen," 
these directives included the declaration of the colonies' indepen- 
dence and the formation of a confederation of the provinces (the 
United Provinces of the Rio de la Plata) from the former Viceroyalty 
of the Rio de la Plata (dissolved in 1810 when independence was 
declared). This formula, inspired by the Constitution of the United 
States, would have guaranteed political and economic autonomy 
for each area, particularly that of the Banda Oriental with respect 
to Buenos Aires. However, the assembly refused to seat the delegates 
from the Banda Oriental, and Buenos Aires pursued a system based 
on unitary centralism. Consequently, Artigas broke with Buenos 
Aires and again besieged Montevideo. 

Artigas lifted his siege of Montevideo at the beginning of 1814, 
but warfare continued among the Uruguayans, Spaniards, and 
Argentines. In June 1814, Montevideo surrendered to the troops 
of Buenos Aires. Artigas controlled the countryside, however, and 
his army retook the city in early 1815. Once the troops from Buenos 
Aires had withdrawn, the Banda Oriental appointed its first auton- 
omous government. Artigas established the administrative center 
in the northwest of the country, where in 1815 he organized the 
Federal League under his protection. It consisted of six provinces — 
including four present-day Argentine provinces — demarcated by 
the Rio Parana, Rio Uruguay, and Rio de la Plata — with Monte- 
video as the overseas port. The basis for political union was cus- 
toms unification and free internal trade. To regulate external trade, 



9 



Uruguay: A Country Study 




— — Colonial boundary 

• Colonial capital 

— n River 

i Spanish territory 

| Portuguese territory 



^^SS^^ Possession disputed by 
Britain and Spain 

400 800 Kilometers 

1 1 I 1 I 1 ' I 1 

400 800 Miles 



Source: Based on information from A. Curtis Wilgus, Historical Atlas of Latin America, New 
York, 1967, 112. 

Figure 2. Three South American Viceroyalties , ca. 1800 

the protectionist Customs Regulations Act (1815) was adopted. That 
same year, Artigas also attempted to implement agrarian reform 
in the Banda Oriental by distributing land confiscated from his 
enemies to supporters of the revolution, including Indians and 
mestizos (people of mixed Indian and European ancestry). 

In 1816 a force of 10,000 Portuguese troops invaded the Banda 
Oriental from Brazil and took Montevideo in January 1817. After 
nearly four more years of struggle, a defeated Artigas fled into exile 
in Paraguay in September 1820 and remained there until his death 
in 1850. After routing Artigas, Portuguese Brazil annexed the 
Banda Oriental as its southernmost Cisplatine Province. 




10 



Historical Setting 



From Insurrection to State Organization, 1820-30 

Following its independence from Portugal in 1822, Brazil was 
confronted by unrest in the Banda Oriental. On April 19, 1825, 
a group of Uruguayan revolutionaries (the famous Thirty-Three 
Heroes) led by Juan Antonio Lavalleja, reinforced by Argentine 
troops, crossed the Rio de la Plata from Buenos Aires and organized 
an insurrection that succeeded in gaining control over the country- 
side. On August 25, 1825, in a town in the liberated area, rep- 
resentatives from the Banda Oriental declared the territory's 
independence from Brazil and its incorporation into the United 
Provinces of the Rio de la Plata. Brazil declared war on them. The 
ensuing conflict lasted from December 1825 to August 1828. 

In 1828 Lord John Ponsonby, envoy of the British Foreign Office, 
proposed making the Banda Oriental an independent state. Brit- 
ain was anxious to create a buffer state between Argentina and 
Brazil to ensure its trade interests in the region. With British medi- 
ation, Brazil and Argentina signed the Treaty of Montevideo at 
Rio de Janeiro on August 27, 1828, whereby Argentina and Brazil 
renounced their claims to the territories that would become integral 
parts of the newly independent state on October 3. However, 
Argentina and Brazil retained the right to intervene in the event 
of a civil war and to approve the constitution of the new nation. 

Argentine and Brazilian troops began their withdrawal, while 
a constituent assembly drew up the constitution of the new coun- 
try, created its flag and coat of arms, and enacted legislation. The 
constitution was approved officially on July 18, 1830, after having 
been ratified by Argentina and Brazil. It established a representa- 
tive unitary republic — the Republica Oriental del Uruguay (Orien- 
tal Republic of Uruguay), the word oriental (eastern) representing 
the legacy of the original designation of the territory as the Banda 
Oriental. The constitution restricted voting, made Roman Catholi- 
cism the official religion, and divided the territory into nine ad- 
ministrative jurisdictions known as departments (see Constitutional 
Background, ch. 4). 

Beginnings of Independent Life, 1830-52 

The First Presidents, 1830-38 

At the time of independence, Uruguay had an estimated popu- 
lation of just under 75,000, of which less than 20 percent resided 
in Montevideo, the capital. Indeed, the new nation was born with 
most of its population scattered throughout the countryside. Polit- 
ical power centered on local leaders, or caudillos, who attracted 
followers because of their power, bravery, or wealth. There were 



11 



Uruguay: A Country Study 

three major caudillos at the time of independence: Rivera, Oribe, 
and Lavalleja. The first two were later elected presidents, Rivera 
from 1830 to 1835 and from 1838 to 1843 and Oribe from 1835 
to 1838. Their rivalry, which turned violent, led to the formation 
of the first political groups, known as Colorados and Blancos 
because of the red and white hatbands, respectively, worn dur- 
ing armed clashes beginning in 1836. The groups would subse- 
quently become the Colorado Party and the National Party (the 
Blancos). 

During the 1830-38 period, the economy came to depend in- 
creasingly on cattle, on the proliferation of saladeros (meat- salting 
establishments), and on the export of salted beef and leather. But 
political instability was the most significant feature of this period. 
Caudillos and their followers were mobilized because of disputes 
arising from deficient land demarcation between absentee land- 
owners and squatters and between rightful owners and Artigas's 
followers who were granted land seized by Artigas. Rivera re- 
mained in the countryside for most of his presidency, during which 
Lavalleja organized three unsuccessful rebellions. Rivera was fol- 
lowed as president by Oribe, one of the Thirty-Three Heroes, but 
they began to quarrel after Oribe permitted Lavalleja and his fol- 
lowers to return from Brazil. Rivera initiated a revolutionary move- 
ment against President Oribe, who, aided by Argentine troops, 
defeated Rivera's forces at the Battle of Carpinteria on Septem- 
ber 19, 1836. In June 1838, however, the Colorados, led by Rivera, 
defeated Oribe 's Blanco forces; Oribe then went into exile in Buenos 
Aires. 

Internationally, the new territory was at the mercy of the in- 
fluence of its neighbors. This resulted from its lack of clearly de- 
fined borders, as well as from Rivera's ties with Brazil and Oribe 's 
with Argentina. 

Rivera again became the elected president in March 1838. In 
1839 President Rivera, with the support of the French and of 
Argentine emigres, issued a declaration of war against Argentina's 
dictator, Juan Manuel de Rosas, and drove Rosas 's forces from 
Uruguay. The French, however, reached an agreement with Rosas 
and withdrew their troops from the Rio de la Plata region in 
1840, leaving Montevideo vulnerable to Oribe 's Argentine-backed 
forces. For three years, the locus of the struggle was on Argen- 
tine territory. Oribe and the Blancos allied themselves with Argen- 
tina's federalists, while Rivera and the Colorados sided with 
Argentina's rival unitary forces, who favored the centralization of 
the Argentine state. In 1842 Oribe defeated Rivera and later, on 



12 



— m ^ "^Ll:: 

Montevideo's Thirty-Three Heroes Obelisk 
Courtesy Inter-American Development Bank 

February 16, 1843, laid siege to Montevideo, then governed by 
the Colorados. 

The Great War, 1843-52 

Oribe's siege of Montevideo marked the beginning of the Great 
War (Guerra Grande, 1843-52). The Great War centered on the 
nine-year-long siege of Montevideo, described by Alexandre Dumas 
as a "new Troy," although the city itself suffered relatively little 
from the war. Britain had saved Montevideo at the outset by allow- 
ing the city to receive supplies. During the Great War, there were 
two governments in Uruguay: the Colorados at Montevideo (the 
so-called government of the "defense") and the Blancos at Cerrito 
(Little Hill), a promontory near Montevideo. 

The intervention first of France (1838-42) and then of Britain 
and France (1843-50) transformed the conflict into an international 
war. First, British and French naval forces temporarily blockaded 
the port of Buenos Aires in December 1845. Then, the British and 
French fleets protected Montevideo at sea. French and Italian 
legionnaires (the latter led by Giuseppe Garibaldi) participated, 
along with the Colorados, in the defense of the city. 

Historians believe that the reason for the French and British inter- 
vention in the conflict was to restore normalcy to commerce in the 



13 



Uruguay: A Country Study 

region and to ensure free navigation along the Rio Parana and Rio 
Uruguay, thus guaranteeing access to provincial markets without 
Buenos Aires 's interference. Their efforts were ineffective, however, 
and by 1849 the two European powers had tired of the war. In 
1850 both withdrew after signing a treaty that represented a tri- 
umph for Rosas of Argentina. 

It appeared that Montevideo would finally fall. But an uprising 
against Rosas led by Justo Jose de Urquiza, governor of Argen- 
tina's Entre Rios Province, with the assistance of a small Uruguayan 
force, changed the situation. They defeated Oribe in 1851, there- 
by ending the armed conflict in Uruguayan territory and leaving 
the Colorados in full control of the country. Brazil then intervened 
in Uruguay in May 1851 on behalf of the besieged Colorados, sup- 
porting them with money and naval forces. With Rosas 's fall from 
power in Argentina in February 1852, the siege of Montevideo was 
lifted by Urquiza' s pro-Colorado forces. 

Montevideo rewarded Brazil's vital financial and military sup- 
port by signing five treaties in 1851 that provided for perpetual 
alliance between the two countries, confirming Brazil's right to in- 
tervene in Uruguay's internal affairs; extradition of runaway slaves 
and criminals from Uruguay (during the war, both the Blancos 
and the Colorados had abolished slavery in Uruguay in order to 
mobilize the former slaves to reinforce their respective military 
forces); joint navigation on the Rio Uruguay and its tributaries; 
tax exemption on cattle and salted meat exports (the cattle indus- 
try was devastated by the war); acknowledgment of debt to Brazil 
for aid against the Blancos; and Brazil's commitment to granting 
an additional loan. Borders were also recognized, whereby Uruguay 
renounced its territorial claims north of the Rio Cuareim (thereby 
reducing its boundaries to about 176,000 kilometers) and recog- 
nized Brazil's exclusive right of navigation in the Laguna Merin 
and the Rio Yaguaron, the natural border between the countries. 

The Struggle for Survival, 1852-75 
Intervention by Neighboring Countries 

After Rosas went into exile in Britain in 1852, internal strife in 
Argentina continued until 1361 , when the country was finally uni- 
fied. Uruguay was affected because each Uruguayan faction ex- 
pressed solidarity with various contenders in Argentina or was, in 
turn, supported by them. 

Brazil's intervention in Uruguay was intensified both because 
of Argentina's temporary weakness and because of Brazil's desire 
to expand its frontiers to the Rio de la Plata. Brazil intervened 



14 



Montevideo's Old City, ca. 1900 
Courtesy Prints and Photographs Division, Library of Congress 

militarily in Uruguay as often as it deemed necessary, in accor- 
dance with the 1851 treaties. In 1865 the Triple Alliance — formed 
by the emperor of Brazil, the president of Argentina, and General 
Venancio Flores (1854-55, 1865-66), the Uruguayan head of 
government whom they both had helped to gain power — declared 
war on Paraguay. Francisco Solano Lopez, Paraguay's megalo- 
maniac dictator, had been verbally ratding his saber against 
Argentina and Brazil. The conflict lasted five years (1865-70) and 
ended with the invasion of Paraguay and its defeat by the armies 
of the three countries. Montevideo, which was used as a supply 
station by the Brazilian navy, experienced a period of prosperity 
and relative calm during the war. 

After the war with Paraguay, the balance of power was restored 
between Argentina and Brazil, the guarantors of Uruguayan in- 
dependence. Thus, Uruguay was able to internalize its political 
struggles, an indispensable condition for consolidation of its in- 
dependence. 

Evolution of the Economy and Society 

After the Great War, immigration increased, primarily from 
Spain and Italy. Brazilians and Britons also flocked to Uruguay 
to snap up hundreds of estancias (ranches). The proportion of the 



15 



Uruguay: A Country Study 

immigrant population in Uruguay rose from 48 percent in 1860 
to 68 percent in 1868. Many were Basques of Spanish or French 
nationality. In the 1870s, another 100,000 Europeans settled in 
Uruguay. By 1879 the total population of the country was over 
438,000. Montevideo, where approximately one-fourth of the popu- 
lation lived, expanded and improved its services. Gas services were 
initiated in 1853, the first bank in 1857, sewage works in 1860, 
a telegraph in 1866, railroads to the interior in 1869, and running 
water in 1871. The creation in 1870 of the typographers' union, 
the first permanent workers' organization, was soon followed by 
the establishment of other unions. Montevideo remained mainly 
a commercial center. Thanks to its natural harbor, it was able to 
serve as a trade center for goods moving to and from Argentina, 
Brazil, and Paraguay. The cities of Paysandu and Salto, on the 
Rio Uruguay, complemented this role. 

After the Great War, livestock raising recovered and prospered. 
Improvements in breeding techniques and fencing were introduced, 
and between 1860 and 1868 sheep breeding, stimulated by Euro- 
pean demand, expanded from 3 million head to 17 million head. 
A group of modernizing hacendados (landowners), a large num- 
ber of whom were foreigners, was responsible for this change. In 
1871 they established the Rural Association (Asociacion Rural) to 
improve livestock-raising techniques. The association developed 
a reputation for defending rural traditions and exerting consider- 
able influence on policy makers. 

Meat-salting enterprises were the main stimulus for the indus- 
trialization of livestock products. In 1865 the Liebig Meat Extract 
Company of London opened a meat-extract factory at Fray Bentos 
on the Rio Uruguay to supply the European armies, thus initiat- 
ing diversification in the sector. This type of meat processing, 
however, was dependent on cheap cattle. As the price of cattle in- 
creased, the meat-extract industry declined, along with the saladeros, 
which prepared salted and sun-dried meat. Cuba and Brazil were 
the main purchasers of salted meat; Europe, of meat extract; and 
the United States and Europe, of leather and wool. 

Caudillos and Political Stability 

Until 1865 the prevailing political idea was fusion {fusion), mean- 
ing unity among Uruguayans, the putting aside of the colors and 
banners that divided them in the past. This idea inspired the 
administrations of Juan Francisco Giro (1852-53), Gabriel Pereira 
(1856-60), and Bernardo Berro (1860-64). Hatred and rivalry flared 
up, however, preventing harmony. Giro was forced to resign. 
Pereira suppressed almost six coup attempts, and Berro, the last 



16 



Historical Setting 



Blanco president until 1958, confronted a revolution led by Colo- 
rado Venancio Flores, who took power with the support of Brazil 
and Buenos Aires. However, General Flores, who had been com- 
manding the armed forces instead of governing the country since 
that March, was assassinated in Montevideo in 1868, on the same 
day that Berro was assassinated. 

During the period preceding the Great War, the long conflict 
between church and state also began. It involved Freemasons in 
government circles and resulted in the expulsion of the Jesuits in 
1859 (they were allowed to return in 1865) and the secularization 
of cemeteries in 1861. Until then the church had almost exclusive 
control over the cemeteries. 

The constitutional government of General Lorenzo Batlle y Grau 
(1868-72) was forced to suppress an insurrection led by the National 
Party. After two years of struggle, a peace agreement was signed 
in 1872 that gave the Blancos a share in the emoluments and 
functions of government, through control of four of the country's 
departments. This establishment of the policy of coparticipation 
(coparticipacion) represented the search for a new formula of com- 
promise, based on the coexistence of the party in power and the 
party in opposition. 

A permanent break in the cycle of near anarchy and repression 
was anticipated when Jose Ellauri (1872-75) was elected president. 
His administration was characterized by the predominance of 
university men over caudillos. A number of them, known as the 
"Girondists of 73," were sent to the General Assembly. Unfor- 
tunately, however, the ensuing economic crisis and the weakness 
of civil power paved the way for a period of militarism. 

Modern Uruguay, 1875-1903 
Militarism, 1875-90 

Between 1875 and 1886, political parties headed by caudillos or 
university men declined, and the military became the center of 
power. A transition period (1886-90) followed, during which poli- 
ticians began recovering lost ground, and there was some civilian 
participation in government. Nevertheless, political parties dur- 
ing this period were not parties in the modern sense of the term. 
Nor, however, was the army a professional institution despite its 
successful foreign and domestic campaigns. 

Because of serious disturbances, Ellauri was forced to resign in 
1875. His successor, Jose Pedro Varela (1875-76), curtailed liberties, 
arrested opposition leaders and deported the most notable among 



17 



Uruguay: A Country Study 



them to Cuba, and successfully quelled an armed rebellion. At the 
beginning of 1876, Colonel Lorenzo Latorre (1876-80) assumed 
power; he was appointed constitutional president in 1879, but the 
following year he resigned, after declaring that Uruguayans were 
"ungovernable," and moved to Argentina. 

Colonel Maximo Santos (1882-86) was appointed president in 
1882 by a General Assembly elected under his pressure, and his 
political entourage named him leader of the Colorado Party. In 
1886 Santos, who had been promoted to general, suppressed an 
insurrection led by the opposition. After an attempt against his life, 
however, he too resigned and went to live in Europe. 

During this authoritarian period (1875-86), the government took 
steps toward the organization of the country as a modern state and 
encouraged its economic and social transformation. Pressure 
groups, particularly businessmen, hacendados, and industrialists, 
were organized and had a strong influence on government, as 
demonstrated by their support of numerous measures taken by the 
state. 

In the international realm, the country improved its ties with 
Britain. Loans increased significantiy after the 1870s, when the first 
one was granted. In 1876 British investors acquired the national 
railroad company, the North Tramway and Railway Company. 
They later dominated construction of railroads and continued their 
policy of ensuring control over, and concessions to, some essential 
services in Montevideo, such as gas (1872) and running water 
(1879). Uruguay's adoption of the gold standard facilitated com- 
mercial transactions between the two countries. 

Under Latorre 's administration, order was restored in the coun- 
tryside. His government vigorously repressed delinquency and 
unemployment (those without jobs were considered "vagrants") 
to protect farmers and ranchers. Fencing of the countryside stimu- 
lated modernization of the system. Barbed wired was such an 
indispensable element for livestock improvement and for the 
establishment of accurate property boundaries that an 1875 law 
exempted imports of barbed wire from customs duties. This mea- 
sure was accompanied by the approval of the Rural Code (1875), 
drawn up with the participation of the Rural Association. The code 
ensured land and livestock ownership and thus social order. 

The government adopted a number of measures to promote 
national industrial development. Most important was a series of 
customs laws in 1875, 1886, and 1888 raising import duties on 
products that could be manufactured in the country, thus protect- 
ing indigenous industry. The Latorre government also improved 
the means of transportation and communications, giving tax and 



18 



Historical Setting 



other concessions for the construction of railroads, whose network 
doubled in size in ten years. The state also reorganized and took 
over the postal service and connected all departmental capitals by 
telegraph. 

Education reform authored by Varela and implemented in 1877 
under the Latorre administration established free compulsory 
primary education. Reform also reached the University of the 
Republic (also known as the University of Montevideo — established 
in 1849 and the country's only university until 1984), where the 
medical and the mathematics faculties were created in 1876 and 
1877, respectively. 

The secularization process also continued during this period. 
Under the pretext of needing to deal with the chaos in parochial 
archives, Latorre created the Civil Register (1876), which trans- 
ferred to the state the registration of births, deaths, and marriages. 
Under the Santos administration, the Law of Mandatory Civil 
Marriage (1885) established that only marriages performed in 
accordance with this law would be considered valid. 

The Return of Civilians 

General Maximo Tajes (1886-90), who was appointed president 
by the General Assembly, tried to restore the constitution and 
remove the military chiefs who had supported Santos. During the 
Tajes administration, civilian political activity resumed. At the end 
of the Tajes term, Julio Herrera y Obes was elected president 
(1890-94). Herrera y Obes belonged to the Colorado Party, had 
been an adviser to his predecessor, and was instrumental in the 
transition process that displaced the military from power. He 
selected his aides from among a small group of friends and was 
convinced that the executive had to play a leading role in elections 
and the makeup of the General Assembly. This policy, called the 
"directing influence," was resisted by a sector of the Colorado Party 
led by Jose Batlle y Ordonez, son of the former president, Lorenzo 
Batlle y Grau. 

In 1894, after much internal debate, the General Assembly 
appointed Juan Idiarte Borda (1894-97), a member of the inner 
circle of the departing administration, as the new president. But 
Herrera y Obes and Borda had succeeded in irritating the National 
Party, when the latter was granted control of only three of the four 
departments agreed on in the 1872 pact between the two rival 
parties. 

In 1897 discontent led to an armed uprising by Blanco forces. 
The insurrection was led by Aparicio Saravia, a caudillo from a 
ranching family originally from the Brazilian state of Rio Grande 



19 



Uruguay: A Country Study 



do Sul who was involved in military and political affairs on both 
sides of the border. The Saravia revolution raised the flag of elec- 
toral guarantees, the secret ballot, and proportional representation. 
Military action had not yet decided the situation when President 
Borda was assassinated. The president of the Senate (the upper 
house of the General Assembly), Juan Lindolfo Cuestas (1897- 
1903), served as provisional president until 1899, when he was 
elected constitutional president. Cuestas quickly signed a peace 
agreement with the National Party, giving it control over six of 
Uruguay's departments and promising all citizens their political 
rights. An anticlericalist, Cuestas placed restrictions on the exer- 
cise of Roman Catholicism and tried to prevent admission to the 
country of friars and priests. 

A majority of the members of the General Assembly, who had 
ties to the Herrera y Obes faction, submitted another presidential 
candidate in 1898 for the scheduled election. Cuestas, unwilling 
to give up power, led a coup d'etat. He included members of the 
opposition in his government in a rudimentary attempt at propor- 
tional representation. Late that same year, the Cuestas regime 
promulgated the Permanent Civil Register Law, dealing with elec- 
toral matters, and the Elections Law, formally establishing the prin- 
ciple of minority representation. Through this legislation, the 
opposition gained access to one-third of the seats if it obtained one- 
fourth of the total votes. 

The political consensus achieved by Cuestas resulted in the unani- 
mous support by the General Assembly for his candidacy and ap- 
pointment as constitutional president in 1899. In fact, however, 
political peace was an illusion. There were, in effect, two coun- 
tries, one Blanco and one Colorado. President Cuestas had to send 
an envoy to caudillo Saravia, near the border with Brazil, in order 
to coordinate government action. This precarious balance would 
break down in 1903 when Batlle y Ordonez took power. 

In spite of political and economic fluctuations, the flow of im- 
migrants continued. From the 1870s to the 1910s, Uruguay's popu- 
lation doubled to just over 1 million inhabitants, 30 percent of whom 
lived in Montevideo. Montevideo also continued to experience 
modernization, including the installation of a telephone system 
(1878) and public lighting (1886). At the same time, the euphoria 
and speculation of the 1870s and 1880s saw a proliferation of banks 
and corporations and a stimulation of land sales, as well as the con- 
struction of multifamily dwellings. 

The economic crisis of 1890 was a traumatic event for Uruguayan 
society. Bankruptcies followed one after another, and the banking 
system saw the collapse of a key banking institution, created by 



20 



Historical Setting 



a Spanish financier, which had served the needs of the state and 
promoted production and construction. 

The ruling elite felt the impact, and some of its more progres- 
sive sectors directed their efforts to the creation of a development 
model for the country. They were aware of both the need to en- 
courage agricultural and industrial development and the need to 
redefine the limits of the state. The growing importance of British 
investment had stimulated the rise of economic nationalism and 
had, by 1898, provoked more active state intervention. 

State intervention in the economy continued in 1896 when the 
electric utility company was transferred to the municipality of 
Montevideo and the Bank of Uruguay (Banco de la Republica 
Oriental del Uruguay — BROU) was created as an autonomous 
entity (autonomous agency or state enterprise; see Glossary). 
Moreover, under Cuestas's administration, the state undertook con- 
struction of the modern harbor of Montevideo, in reaction to the 
new facility in Buenos Aires, which had absorbed part of the river 
traffic with Paraguay and the Argentine littoral. Nevertheless, the 
nationalization of economic activities and the creation of state enter- 
prises did not fully gather momentum until the administration of 
Batlle y Ordonez. 

The New Country, 1903-33 
Batlle y Ordonez and the Modern State 

The election of Jose Batlle y Ordonez as the first Uruguayan 
president in the twentieth century (1903-07, 1911-15) marked the 
beginning of a period of extraordinary change in the country. The 
son of former President Lorenzo Batlle y Grau, Batlle y Ordonez 
was a member of the Colorado Party, founder of the newspaper 
El Dia (in 1886), and an active opponent of militarism. 

The dominant political event during the first administration of 
Batlle y Ordonez was another National Party insurrection in 1904, 
led by Saravia. After nine months of fierce fighting and Saravia's 
death, it ended with the Treaty of Acegua (1904). The civil war 
triumph of Batlle y Ordonez and the Colorados meant the end of 
the coparticipation politics that began in 1872, the political and 
administrative unification of the country, the consolidation of the 
state, and, most profoundly, the end of the cycle of civil wars that 
had persisted throughout the nineteenth century. 

The period's most significant economic change occurred in meat 
processing. In 1905 the first shipment of frozen beef, produced 
by a refrigeration plant (Jrigorifico) established by local investors 
two years before, was exported to London in a refrigerated ship. 



21 



Uruguay: A Country Study 

Uruguay now entered the age of refrigeration, making possible the 
diversification of one of its main export items and giving the country 
access to new markets. With the inauguration of the modernized 
port of Montevideo in 1909, Uruguay could compete with Buenos 
Aires as a regional trade center. 

Claudio Williman (1907-11), the president's handpicked can- 
didate, succeeded Batlle y Ordonez, who sailed for Europe, where 
he spent the next four years studying governmental systems. In 
some respects, Williman' s administration was considered more con- 
servative than that of Batlle y Ordonez, although Batllists main- 
tained their political influence. Williman tried to ensure political 
peace by enacting electoral laws in 1907 and 1910 that increased 
political representation of minority opposition parties. Williman 
also ensured peace with Uruguay's northern neighbor by signing 
a border treaty with Brazil, thereby putting an end to pending liti- 
gation and disputes dating back half a century. 

The National Party, disappointed with Williman 's electoral laws 
and with the announcement that Batlle y Ordonez would once again 
run for president, did not participate in the elections held in 1910. 
This helped foster the emergence of two new political parties: the 
Catholic-oriented Civic Union of Uruguay (Union Civica del 
Uruguay — UCU) and the Marxist-inspired Socialist Party of Uru- 
guay (Partido Socialista del Uruguay — PSU). Church and state 
relations also underwent changes. The government passed a divorce 
law in 1907, and in 1909 it eliminated religious education in pub- 
lic schools. 

In 1911 Batlle y Ordonez reassumed the presidency. A non- 
Marxist social democrat, he set about modernizing the country, 
taking into account the aspirations of emerging social groups, in- 
cluding industrialists, workers, and the middle class. Writing and 
promoting progressive social legislation, Batlle y Ordonez fought 
for the eight-hour workday (enacted in 1915 under the adminis- 
tration of his successor), unemployment compensation (1914), and 
numerous pieces of social legislation. Some of these would be ap- 
proved years later, such as retirement pensions (1919) and occupa- 
tional safety (1920) (see Batllism, ch. 3). 

Batlle y Ordonez firmly believed that the principal public ser- 
vices had to be in the hands of the state to avoid foreign remit- 
tances that weakened the balance of payments and to facilitate 
domestic capital accumulation. In a relatively short period of time, 
his administration established a significant number of autonomous 
entities. In 1911 it nationalized BROU, a savings and loan insti- 
tution that monopolized the printing of money. In 1912 the govern- 
ment created the State Electric Power Company, monopolizing 



22 



Contrasting buildings in Montevideo's Old City 
Courtesy Edmundo Flores 



23 



Uruguay: A Country Study 



electric power generation and distribution in the country; it na- 
tionalized the Mortgage Bank of Uruguay; and it founded three 
industrial institutes for geology and drilling (coal and hydrocarbon 
explorations), industrial chemistry, and fisheries. In 1914 it pur- 
chased the North Tramway and Railway Company, later to be- 
come the State Railways Administration. 

Attempts to change the agrarian productive structure were not 
as successful. Influenced by United States economist Henry George, 
Batlle y Ordonez thought that he could combat extensive landhold- 
ings by applying a progressive tax on land use and a surcharge 
on inheritance taxes. The agrarian reform plan also contemplated 
promoting colonization and farming. Very little was accomplished 
in this regard, however, partly because of the opposition of large 
landowners who created a pressure group, the Rural Federation 
(Federation Rural), to fight Batlle y Ordonez's policies. The govern- 
ment did make one important accomplishment with regard to 
agriculture, namely, the creation of a series of government insti- 
tutes dedicated to technological research and development in the 
fields of livestock raising, dairying, horticulture, forestation, seeds, 
and fodder. 

The government adopted a protectionist policy for industry, im- 
posing tariffs on foreign products, favoring machinery and raw 
materials imports, and granting exclusive licensing privileges to 
those who started a new industry. Indigenous companies sprang 
up, but foreign capital — especially from the United States and 
Britain — also took advantage of the legislation and came to con- 
trol the meat industry. The growth of the frigorifico meat-processing 
industry also stimulated the interbreeding of livestock, Uruguay's 
main source of wealth. 

Education policy was designed to take into account the continu- 
ous inflow of European migrants. Although it fluctuated, immigra- 
tion was significant until 1930. Furthermore, education was a key 
to mobility for the middle classes. The state actively sought to ex- 
pand education to the greatest number of people by approving free 
high school education in 1916 and creating departmental high 
schools throughout the country in 1912. A "feminine section" was 
created to foster mass attendance of women at the University of 
the Republic, where the number of departments continued to 
expand. 

The secularization process, initiated during the second half of 
the nineteenth century, was accelerated by Batlle y Ordonez's anti- 
clericalism. Uruguay banned crucifixes in state hospitals by 1906 
and eliminated references to God and the Gospel in public oaths 
in 1907. Divorce laws caused a confrontation between church and 



24 



Historical Setting 



state. In addition to the 1907 and 1910 laws (divorce with cause 
and by mutual agreement), a law was passed in 1912 allowing 
women to file for divorce without a specific cause, simply because 
they wanted to. 

Batlle y Ordonez also proposed the institutional reorganization 
of government in 1913. Essentially, he wanted to replace the pres- 
idency with a nine-member collegial executive {colegiado) inspired 
by the Swiss model (see Constitutional Background, ch. 4). This 
proposal caused an immediate split in the Colorado Party. One 
sector opposed the political reform and also feared some of Batlle 
y Ordonez's economic and social changes. Subsequendy, these dis- 
sidents, led by Carlos Manini Rfos, founded a faction known as 
the Colorado Party-General Rivera (Riverism). The National 
Party, under Luis Alberto de Herrera, the leading opposition figure 
from 1920 to his death in 1959, did not back Batlle y Ordonez's 
proposal either. 

Feliciano Viera (1915-19), a Colorado who was more conser- 
vative than Batlle y Ordonez, became president at the time of the 
debate between "collegialists" and "anticollegialists." During his 
mandate, elections were held for a constituent assembly (July 30, 
1916). The rules for this election enabled the National Party to 
ensure incorporation of many of the principles it advocated, such 
as the secret ballot, partial proportional representation, and univer- 
sal male suffrage. 

Batlle y Ordonez and his political faction of the Colorados lost 
these first popular elections, but the Colorados continued to be the 
majority party, and the 1917 constitution, the country's second, 
reflected many of the changes that had taken place under Batlle 
y Ordonez. It separated church and state, expanded citizens' rights, 
established the secret ballot and proportional representation, and 
banned the death penalty. It also created autonomous state enter- 
prises in the areas of industry, education, and health. But in a bit- 
ter compromise for Batlle y Ordonez, the executive was divided 
between the president, who appointed the ministers of foreign 
affairs, war, and interior, and the nine-member colegiado, the Na- 
tional Council of Administration (Consejo Nacional de Adminis- 
tracion). The latter, which included representatives from the party 
that received the second highest number of votes, the Blancos, was 
placed in charge of the ministries dealing with economic, educa- 
tional, and social policy. 

President Viera, like many of Batlle y Ordonez's followers, inter- 
preted the 1916 electoral defeat as a direct consequence of previ- 
ous policy. He thus announced a halt to economic and social 
reforms. Some of the old projects as well as some new proposals 



25 



Uruguay: A Country Study 

were approved, however, such as restrictions on night work in 1918 
and the creation in 1916 of a new autonomous entity, the Monte- 
video Port Authority, also known as the National Administration 
of Ports (Administracion Nacional de Puertos — ANP). Workers' 
strikes, however, were repressed severely. Finally, in 1919 Viera, 
in disagreement with Batlle y Ordonez, founded a dissident Colo- 
rado Party faction known as Vierism. 

The Consolidation of Political Democracy 

The 1920s witnessed electoral struggles in which the various par- 
ties sought to consolidate the political peace achieved in 1904. The 
National Party participated actively in political life, and although 
the Colorado Party was dominant, its electoral advantage was slight. 
Relative electoral parity and the still recent memory of the last 
armed uprising compelled participants to preserve electoral purity 
and to improve the corresponding legislation. In 1924 the Elec- 
toral Court was created to prepare and control national elections. 
The 1917 constitution eliminated restrictions on male suffrage and 
required elections almost every year to renew the various govern- 
mental bodies. 

Each political party was internally divided because of ideological, 
economic, and social differences. To the existing Colorado fac- 
tions — Riverism and Vierism — were added the Colorado Party for 
Tradition (also known as Sosism), founded by Julio Maria Sosa 
in 1925, and the Advance Grouping (Agrupacion Avanzar), 
founded by Julio Cesar Grauert in 1929. Splinter groups of the 
National Party included the Radical Blanco Party, founded by 
Lorenzo Carnelli in 1924, and Social Democracy, founded by 
Carlos Quijano in 1928. The small PSU also split in 1920, and 
one of its factions formed the Communist Party of Uruguay (Partido 
Comunista del Uruguay — PCU). The parties were divided into 
"traditional" (Colorado Party and National Party) and "minor," 
or "ideological," parties (UCU, PSU, and PCU). The former, 
by means of a 1910 law that allowed a double simultaneous vote 
for a party and a faction of the party (sub-lema), became "federa- 
tions" of parties with different agendas and were thus able to at- 
tract followers from all sectors of society. 

These contradictions forced Batlle y Ordonez to make electoral 
arrangements with his opponents within the Colorado Party to pre- 
vent the victory of the National Party. The resultant "politics of 
compromise" diluted his reformist agenda. Baltasar Brum (1919- 
23), one of Batlle y Ordonez's followers and a former foreign 
minister, was succeeded as president by a "neutral" Colorado, Jose 
Serrato (1923-27), who turned over the office to a Riverist, Juan 
Campisteguy (1927-31). 



26 



Historical Setting 



It was difficult for adherents of Batllism to implement their 
agenda despite having the occasional support of other political sec- 
tors. Nevertheless, additional social reforms were enacted. In 1920 
compensation for accidents in the workplace and a six-day work 
week were made law. In 1923 a minimum rural wage was passed, 
although it was never enforced. A social security system was created 
in 1919 for public-sector employees, and the program was extended 
to the private sector in 1928. Despite the reforms, a union move- 
ment, weak in numbers, was organized in several umbrella or- 
ganizations: the Uruguayan Syndicalist Union, encompassing 
anarcho-syndicalists and communists, in 1923; and the communist 
General Confederation of Uruguayan Workers, in 1929. 

The only state enterprise created during these years reflected the 
difficulties in expanding state control over industry because of oppo- 
sition from the conservatives. Ranchers complained that foreign 
refrigeration plants, which had established quotas for shipments 
and for access of meat to the London market, did not pay a fair 
price for cattle. In 1928 the government created National Refriger- 
ating (Frigonfico Nacional — Frigonal) as a ranchers' cooperative 
supported by the state and governed by a board made up of 
representatives from the government, the Rural Association, and 
the Rural Federation. 

Although the country had suffered the immediate consequences 
of the post- World War I crisis, a period of recovery had quickly 
followed. It was characterized by growing prosperity sustained 
mainly by United States loans. A continued increase in popula- 
tion accompanied economic prosperity. The 1920s saw the arrival 
of the last great wave of immigrants, consisting mainly of Syrians, 
Lebanese, and East Europeans. Between 1908 and 1930, Monte- 
video's population doubled. 

In 1930 Uruguay celebrated the centennial of the promulgation 
of its first constitution and won its first World Cup in soccer. Elec- 
tions were held that year, the results of which were to presage 
difficulties, however. Batlle y Ordonez died in 1929, leaving no 
successor for his political group. The Blanco leader, Herrera, was 
defeated by a wide margin of votes for the first time. The electoral 
balance between the parties had been broken. By a few votes, the 
conservative Colorado Manini, a Riverist leader and newspaper 
publisher, failed to become president. 

The Conservative Adjustment, 1931-43 

The Terra Era, 1931-38 

Gabriel Terra (1931-38), a "heterodox" Batllist who had differed 
with Batlle y Ordonez and who would soon distance himself from 



27 



Uruguay: A Country Study 



the latter's sons and followers, became president in March 1931. 
For the first time, the Batllist wing of the Colorados had a strong 
representation in the colegiado. 

Terra's inauguration coincided with the effects of the Great 
Depression and a worsening of Uruguay's economic and social sit- 
uation. Prices of agricultural products plunged. In 1932 Britain, 
traditionally the major purchaser of Uruguayan exports, began re- 
stricting purchases of meat. Uruguay's currency was devalued, and 
unemployment grew rapidly. 

Batllists tried to implement their program from the colegiado. In 
1931 BROU was authorized to control purchases and sales of for- 
eign exchange and to set exchange rates, a measure that initially 
jeopardized cattle ranchers, exporters, and private banks. In the 
face of foreign-exchange scarcity, foreign companies were forced 
to suspend remittances abroad. Limits on imports were imposed 
to try to reduce the balance of payments deficit and to stimulate 
industrialization. Furthermore, attempts were made to reduce the 
fiscal deficit. At the same time, a political agreement known as the 
Pork Barrel Pact (Pacto del Chinchulin) between the Batllists and 
an emerging sector of the National Party opposing Herrera made 
possible the expansion of state control over industry. The pact 
resulted in the creation of the National Administration of Fuels, 
Alcohol, and Portland Cement (Administration Nacional de Com- 
bustibles, Alcohol, y Portland — ANCAP), a state enterprise with 
a monopoly over oil refining and alcohol production, and the power 
to begin producing portland cement. Unfortunately, it quickly 
became a source of patronage for the party faithful. The State Elec- 
tric Power Company was granted a monopoly over the telephone 
system, becoming the State Electric Power and Telephone Com- 
pany (Usinas Electricas y Telefonos del Estado). 

Social reform measures, such as the adoption of the forty-four- 
hour work week, and the growing economic crisis alarmed the most 
conservative sectors and affected the interests of large cattle ranch- 
ers, import merchants, foreign capital, and the population at large. 
The social climate became tense as a result of the lack of jobs. There 
were confrontations in which police and leftists died. 

Terra distanced himself from his followers and began a campaign 
to reform the constitution and eliminate the colegiado, which was 
responsible for making economic and social policy and which Terra 
accused of inefficiency and lack of vision to overcome the crisis. 
He was supported by the National Economic Inspection Commit- 
tee, which was created in 1929 and encompassed most business 
organizations. This committee proposed restricting statism, ending 



28 



Historical Setting 



implementation of social legislation, and suspending the applica- 
tion of new taxes. 

During the first months of 1933, when it became evident that 
Uruguay would have serious difficulties in paying the interest on 
its foreign debt, Terra obtained the support of Herrera and of 
Manini to organize a coup d'etat. On March 31, 1933, Terra dis- 
solved the General Assembly and the colegiado and governed by 
decree. Former President Brum (a Batllist) committed suicide one 
day after the fall of the liberal democratic regime. Another Batllist 
leader, Grauert, was assassinated. The Terra regime deported 
numerous opposition leaders and imposed press censorship. 

In June 1933, elections were held for a constituent assembly that 
would be responsible for reforming the constitution. In 1934 the 
new constitution was submitted to a plebiscite, and although re- 
election of the president was unconstitutional, Terra was elected 
to a new term. More than half of the electorate participated in these 
elections, distributing their preferences between parties support- 
ing the coup and those opposing it. The constitution promulgated 
in 1934 formally eliminated the colegiado and transferred its powers 
to the president. The new constitution restricted the creation of 
autonomous entities by requiring approval by a two-thirds majority 
in each chamber of the General Assembly. It banned usury, recog- 
nized certain social rights (e.g., housing and the right to work), 
and established women's suffrage. The cabinet ministers and heads 
of autonomous enterprises were to be distributed between the two 
parties obtaining the most votes, in a two- thirds to one-third ratio. 
The Senate was to be divided in half between the two parties win- 
ning the most votes, thus ensuring control by the coup factions. 
The Chamber of Representatives was to be elected by proportional 
representation. 

In the mid- 1930s, the opposition tried, unsuccessfully, to organize 
itself and resist the regime in the face of persecution. Military and 
armed civil uprisings were suppressed. In 1935 a political oppo- 
nent unsuccessfully tried to assassinate Terra. An attempt to form 
a "popular front," including the left and dissident Colorados and 
Blancos, was also unsuccessful. To prevent this coalition, as well 
as a coalition of sectors from the traditional parties, from oppos- 
ing the regime's social and economic policies, a series of electoral 
laws was promulgated beginning in 1934. The new Political Parties 
Law granted control of the Colorado and Blanco slogans, or party 
titles, to those who had participated in the elections and therefore 
supported the dictatorship. 

Support from ranchers, one of the sectors most affected by the 
crisis, seemed to indicate a return to the traditional agro-exporting 



29 



Uruguay: A Country Study 



model. However, neither the "machete dictatorship" (an ironic 
name given to the regime by the socialist leader and writer Emilio 
Frugoni, referring to Terra's use of the police during the coup) 
nor the "March Revolution" (as it was solemnly called by its or- 
ganizers) stressed an agrarian alternative because unemployment 
seemed to call for a diversification of the job market. Moreover, 
Uruguay was already an urban country with budding industriali- 
zation. 

Terra's economic policies supported both livestock raising and 
industry, if unevenly. Livestock had stagnated — the 1930 livestock 
census showed fewer animals than the 1908 census. The problem 
of increasing livestock productivity remained unsolved, despite 
advances in breeding. Cattle ranchers were granted premiums in 
order to improve the quality of herds. Other benefits accorded them 
included tax rebates, debt- servicing alternatives, preferential ex- 
change privileges, and the effects of the 1935 devaluation. At the 
same time, import limitations adopted in 1931 continued in effect, 
and in 1935 an industrial franchise law was passed. Industrial 
activities were further protected by currency depreciation and the 
fall in salaries caused by an abundance of labor. 

The Terra government also attempted to regulate foreign trade. 
BROU maintained control over the price and sale of foreign cur- 
rency. In 1934 the government created the Honorary Commission 
for Imports and Exchange to control the allotment of import quotas 
and foreign exchange. The government used pesos (for value of 
the peso — see Glossary) to pay the reduced interest rates on the 
foreign debt. It also carried out, in 1937, satisfactory negotiations 
for a new payment schedule with the United States and, in 1939, 
with Britain. 

In general, the Terra government weakened or neutralized eco- 
nomic nationalism and social reform, the most controversial facets 
of the Batllist model. British public-service industries (railroads, 
water, gas, and tramways) and United States industries (oil, cement, 
refrigeration plants, and automobiles) that were established in the 
early 1900s received additional concessions. The government did 
not privatize existing state enterprises, as would have been expected 
from the antistatism espoused by Herrerists and Riverists. State 
enterprises were, however, affected in 1936 by a law that elimi- 
nated provisions granting some autonomous state enterprises the 
power to establish monopolies. ANCAP began constructing an oil 
refinery, and in 1938 it guaranteed private oil companies partici- 
pation in Uruguay's market. 

Nevertheless, although the government abolished certain redis- 
tributive policies fostered by social legislation, it reinforced the 



30 



Historical Setting 



public assistance role of the state. It created "emergency jobs" for 
the unemployed through the National Affordable Housing Insti- 
tute (1937) and the Institute for the Scientific Nutrition of the People 
(1937). In 1934 legislation was passed that regulated child labor 
for minors over twelve years of age, allowed maternity leave, and 
extended pensions to all commercial and industrial sectors, including 
employers. 

The government also revamped the education system. The 
University of the Republic, whose structure had been transformed 
by the creation of new faculties (for example, engineering and 
architecture in 1915, chemistry and dentistry in 1929, and eco- 
nomics in 1932), no longer administered secondary education, 
which in 1935 was handed over to an autonomous agency. 

The foreign policy of the regime resulted in a substantial im- 
provement of relations with the United States (Franklin D. 
Roosevelt visited Uruguay in 1936) and with Britain. Under a 1935 
pact with Britain, Uruguay agreed to pay its foreign debt, to pur- 
chase British coal, and to treat British companies generously in 
exchange for ensuring placement of Uruguayan products. In 1935 
Uruguay severed relations with the Soviet Union and in the next 
year, with Republican Spain. At the same time, however, it es- 
tablished closer relations with Benito Mussolini's Italy and Adolf 
Hitler's Germany. Construction of a hydroelectric dam at Paso 
de los Toros on the Rio Negro was begun in 1937 with German 
capital, creating the Embalse del Rio Negro, the largest artificial 
lake in South America. 

In 1938 general elections were held — the first in which women 
were allowed to vote. Terra divided his support between his son- 
in-law's father, Eduardo Blanco Acevedo, and his brother-in-law, 
General Alfredo Baldomir. These candidacies reflected a split in 
Terra's political faction within the Colorado Party. The PSU and 
PCU joined forces to vote for a common candidate, but the Colo- 
rado Party won. Baldomir (1938-43) was elected president. Once 
again, Badlists, Independent Nationalists, and Radical Blancos 
abstained from voting. 

Baldomir and the End of Dictatorship 

After his inauguration, and after suppressing a coup attempt, 
Baldomir announced his intention to reform the 1934 constitution 
but then procrastinated on carrying out the project. Several months 
later, the opposition led one of the most important political demon- 
strations in the history of the country, demanding a new constitu- 
tion and a return to democracy. Under pressure from organized 



31 



Uruguay: A Country Study 

labor and the National Party, Baldomir advocated free elections, 
freedom of the press, and a new constitution. 

Baldomir' s administration could not avoid the consequences of 
World War II or the pressures and interests of the Allied forces. 
Although he declared Uruguay's neutrality in 1939, that Decem- 
ber the Battle of the Rio de la Plata took place. The badly damaged 
German battleship GrafSpee, cornered by a British naval force and 
required by the Uruguayan government to leave its refuge in the 
port of Montevideo, was blown up and scuttled by its own crew 
just outside the harbor. After this, Uruguay assumed a pro-Allied 
stance. In 1940 it began an investigation of Nazi sympathizers and 
finally, in 1942, broke relations with the Axis. 

The Blancos persistently attempted to obstruct legislation in- 
troduced by Baldomir and criticized the Colorados' policy of cooper- 
ation with the United States in hemispheric defense. Baldomir' s 
Blanco ally, Herrera, fought for neutrality, and in 1940 Herrera 
opposed the installation of United States bases in Uruguay. In 1941 
Baldomir forced his three Herrerist ministers to resign; they had 
been appointed to his cabinet in accordance with provisions of the 
1934 constitution. Baldomir subsequently appointed a board, without 
the participation of Herrerists, to study a constitutional reform. 
Finally, in February 1942 Baldomir dissolved the General Assem- 
bly and replaced it with the Council of State (Consejo de Estado), 
composed of Batllists and other Colorados. This quasi-coup was car- 
ried out without arrests, deportations, or the closing of newspapers. 
It was an in-house agreement to overcome the institutional crisis 
initiated on March 31, 1933, and to avoid enforcement of the exist- 
ing constitution. Batllists and Communists welcomed the new situ- 
ation, but the Socialists argued that Baldomir had been one of the 
protagonists of the 1933 coup. Independent Nationalists remained 
on the sidelines. Herrerism, freely accused of being pro-Nazi, pro- 
Franco, and pro- Argentine, was the big loser. 

In November 1942, national elections were held. Although an 
electoral law had been passed in 1939 to avoid the formation of 
coalitions that would endanger the two-party system (Blancos and 
Colorados), Independent Nationalists were allowed to participate 
as a new political party, separate from Herrerism. Thus, the Na- 
tional Party divided into two splinter parties and continued as such 
until 1958. Socialists and Communists were also split, a situation 
that continued until 1971, when the Broad Front (Frente Amplio) 
coalition was created. Batllists supported the Colorado candidate, 
Juan Jose Amezaga (1943-47), who won the election. 

At the same time, a new constitution was submitted to plebis- 
cite and was approved by 77 percent of the electorate. As amended 



32 




A rural highway near Punta del Este 
Courtesy Inter-American Development Bank 

on November 19, 1942, the constitution retained the presidency, 
restored the General Assembly, implemented strict proportional 
representation in the Senate, and abolished the mandatory co- 
participation imposed by the 1934 constitution for ministries and 
boards of autonomous entities. 

"There's No Place Like Uruguay/' 1943-58 

The Administration of Amezaga, 1943-47 

After Amezaga ^institutionalized and restored civil liberties, 
Uruguay entered a new historical era, characterized by the increas- 
ing importance of industrialization and significant gains for virtu- 
ally all sectors of society. No other phrase expresses as eloquently 
perceptions about this period by the average citizen as the slogan 
proclaimed by a politician: "Como el Uruguay no hay" (There's 
no place like Uruguay). During the Amezaga administration, the 
state reorganized its interventionist and welfare role and strongly 
pushed social legislation. In 1943 the government implemented a 
system of wage councils (including representatives from the state, 
workers, and employers) to set salaries, and it established a fam- 
ily assistance program. In 1945 the General Assembly passed 
legislation requiring paid leave for all work activities, as well as 
other legislation that addressed the needs of rural workers, one of 



33 



Uruguay: A Country Study 

Uruguay's poorest sectors. In 1943 the rural workers were incor- 
porated into the pension system, and in 1946 the Rural Worker 
Statute set forth their rights and also put women's civil rights on 
a par with men's. 

Neo-Batllism, 1947-51 

From the beginning of the 1940s, and especially after creation 
of the wage councils, real wages increased, which meant an im- 
provement in the living standards of the working class and dyna- 
mism in the internal market. The period of increased industrial 
development lasted from 1945 to 1955; total production practically 
doubled during this time. Agriculture also experienced a boom. 
Social legislation was improved, the pension system was expanded, 
and the state bureaucracy grew. Resorts near Montevideo were 
developed through the sale of lots on the installment plan, and Punta 
del Este became an international tourist attraction. Gold reserves 
in BROU reached their highest level ever. In 1950, when Uruguay 
again won the World Cup in soccer, it was already known as the 
"Switzerland of South America." 

Batllism returned to power with the victory of the presidential 
ticket of Tomas Berreta (1947) and Luis Batlle Berres (1947-51) 
in the 1946 elections. Berreta' s administration was brief; he died 
six months after taking office and was succeeded by his vice presi- 
dent, Batlle Berres. 

Batlle Berres, a nephew of Jose Batlle y Ordonez, represented 
the most popular faction of Badlism, later to be known as Unity 
and Reform (Unidad y Reforma), or List 15 because of the list 
number under which it would participate in successive elections. 
He gradually became estranged from his cousins — Lorenzo and 
Cesar, Badle y Ordonez's sons — who promoted a more conserva- 
tive vision from their newspaper, El Dia, and who would later form 
a new Colorado Party faction, List 14. Batlle Berres founded his 
own newspaper (Action) in 1948, bought a radio station, and sur- 
rounded himself with young politicians. His ideological-political 
agenda, adapted to the changes in his country and the world, be- 
came known as neo-Batllism. He rejected the communist and 
populist-authoritarian experiences of other Latin American coun- 
tries, especially that of Juan Domingo Peron in Argentina. Batlle 
Berres formed a multiclass movement that promoted compromise 
and conciliation. He believed the state's role was to safeguard so- 
cial peace and to correct, through adequate measures, the "unfair 
differences" created by the socioeconomic structure. In contrast 
to Peronism, neo-Batllism respected the political autonomy of the 
workers' movement, accepted social cooperation, and rejected 



34 



Historical Setting 



the kind of corporative structure that characterized Mexico's 
governing party. 

Batlle Berres was an enthusiastic supporter of economic develop- 
ment based on import-substitution industrialization (see Glossary) 
and agricultural expansion. He applied interventionist and statist 
economic measures to promote such development and did not abide 
by the IMF's austerity recommendations. He supported agricul- 
ture and industry through credits and subsidies, as well as control 
over the nation's currency, a fact that brought him into conflict 
with ranchers. BROU, which controlled sales of foreign currency, 
paid less for foreign currency earned from livestock raising to favor 
industrial requirements for raw materials and machinery. This 
differential exchange-rate policy stimulated the development of light 
industry, more than 90 percent of which was directed toward the 
internal market. Nevertheless, the state guaranteed profitable prices 
for agriculture and stimulated imports of agricultural machinery. 
New crops were developed to supply industry with raw materials, 
and surpluses were exported. By contrast, livestock raising con- 
tinued to stagnate. 

An earlier agreement with Britain obliged the government to 
acquire some British enterprises to cancel its outstanding debt to 
Britain. The state's economic role was thus increased through the 
creation of new public service enterprises, including Montevideo's 
tramways, railroads, and water system. 

Another potentially significant event in the socioeconomic realm 
was the creation of the National Land Settlement Institute in 1948. 
It was designed to stimulate land subdivision and agricultural and 
livestock settlements and was authorized to purchase and expropri- 
ate land. But action was limited because of a lack of funds, and 
significant agrarian reform never took place. However, in order 
to favor lower-income groups, subsidies were set for various basic 
food items, and in 1947 the National Subsistence Council was 
created to control the price of basic items. 

The traditional parties maintained their differences, which were 
reflected in the significant variations in their platforms. The Polit- 
ical Parties Law, which allowed party factions to accumulate votes, 
guaranteed the predominance of the Colorado Party. Together, 
the Colorados and Blancos continued to capture almost 90 percent 
of the votes. But because of the splits in his own party, Batlle Berres 
was forced to seek political support from other factions. Paradoxi- 
cally, he sought a ' 'patriotic coincidence" with Herrera and gave 
cabinet posts to some leading figures of Terrism, past enemies within 
his own party. 



35 



Uruguay: A Country Study 

Conservative sectors, particularly landowners, opposed or dis- 
trusted the growing bureaucracy, the expansion of social legisla- 
tion, and the policy of income redistribution that favored the 
industrial sector to the detriment of the rural sector. In 1950 Benito 
Nardone — an anticommunist radio personality supported by Juan 
Domingo R. Bordaberry, one of the directors of the Rural Feder- 
ation (and father of Juan Maria Bordaberry Arocena; president, 
1972-76) — created the Federal League for Rural Action (Liga Fed- 
eral de Accion Rural — LFAR). The Ruralist faction thus created 
attempted to unite the disenchanted rural middle-class constituen- 
cies, especially wool producers, from both traditional parties. He 
proposed a free-market economic model in contrast to Luis Batlle 
Berres's statist model. 

Unity and Reform won the 1950 elections. Its presidential can- 
didate was a Batllist, Andres Martinez Trueba (1951-55), who 
quickly put forward a new constitutional amendment, this time to 
make good on Batlle y Ordonez's dream of a purely plural execu- 
tive, the colegiado. He was supported by Herrera, who was seeking 
to enhance both his personal power and Blanco political power and 
to recover the ground lost in the 1942 coup. He was also supported 
by conservative Colorado factions who feared Batlle Berres's be- 
coming president again. 

The new constitution was approved by plebiscite in 1951 and 
went into effect in 1952. It reestablished the colegiado as the Na- 
tional Council of Government (Consejo Nacional de Gobierno). 
The council had nine members, six from the dominant faction of 
the majority party and three from the party receiving the second 
highest number of votes (two from its leading faction and one from 
its second-ranking faction). The presidency was to rotate each year 
among the six members of the majority party. The constitution 
mandated coparticipation in directing autonomous entities and 
ministries, using a three-and-two system (three members appointed 
by the majority party on the council and two by the minority party). 
Uruguay enjoyed unprecedented prosperity at this time, and the 
establishment of a purely collegial, Swiss-style executive reinforced 
the country's title as the "Switzerland of South America." 

Decline of the Economy and the Colorado Party, 1951-58 

The Martinez administration in the first half of the 1950s, 
however, was one of economic decline. At the end of the Korean 
War (1950-53), during which Uruguay had exported wool for cold- 
weather uniforms, Uruguay experienced a reduction in exports, 
a drop in the price of agricultural and livestock products, labor 
unrest, and unemployment. Livestock production, which had 



36 



Historical Setting 



basically stagnated since the 1920s, was not capable of providing 
the foreign exchange needed to further implement the import- 
substitution industrialization model. Starting in 1955, the indus- 
trial sector stagnated and inflation rose. At the same time, Uru- 
guay had difficulties with the United States regarding wool exports 
and suffered the negative effects of both restrictive United States 
trade policies and competition from the foreign sales of United States 
agricultural surpluses. 

In 1951 a faction opposing the more radical leadership of the 
General Union of Workers (Union General de Trabaj adores — 
UGT; established in 1942) founded the General Confederation of 
Labor. Nevertheless, strikes and stoppages continued. In 1952, in 
the face of labor unrest, the National Council of Government in- 
voked the emergency provision of the constitution known as the 
medidas prontas de seguridad (prompt security measures). From 1956 
to 1972, the gross national product (GNP — see Glossary) fell 12 
percent, and in the decade from 1957 to 1967 real wages for pub- 
lic employees fell 40 percent. In 1958 the General Assembly ap- 
proved strike insurance and maternity leave. In addition, worker 
and student mobilization pressured the General Assembly into ap- 
proving the Organic University Law, whereby the government 
recognized the autonomy of the University of the Republic and 
the right of professors, alumni, and students to govern it. Neverthe- 
less, labor unrest increased. 

At first, dramatic political events masked the economic crisis. 
In the 1958 elections, the Independent Nationalists, who had joined 
the Democratic Blanco Union (Union Blanca Democratica — UBD), 
agreed to include their votes under the traditional National Party 
of the Herrerists. Thus, for the first time in decades, the National 
Party voted as one party. In addition, Herrera joined forces with 
Nardone and his LFAR, transforming it from a union into a po- 
litical movement. Aided by the LFAR and a weakening economy, 
the National Party won, and the Colorado Party lost control of the 
executive for the first time in ninety-four years. 

Economic Crisis and Decline 

The Blanco Administrations, 1959-67 

From March 1959 to February 1967, eight National Party gov- 
ernments ruled Uruguay. The death of Herrera (1959) aggravated 
divisions in the National Party and demonstrated the fragility of 
the electoral accords that had led to its victory. The economic cri- 
sis and social unrest that had beset Uruguay from the mid-1950s 
continued, and the 1960s opened with gloom and sadness for the 



37 



Uruguay: A Country Study 

country. At the time of the 1962 elections, inflation was running 
at a historically high 35 percent. The Colorado Party was defeated 
once again, although by a much smaller margin of votes (24,000 
as compared with 120,000 in 1958). The National Party split. The 
UBD joined a splinter faction of Herrerism, the Orthodox faction, 
led by Eduardo Victor Haedo. Another faction of Herrerism, led 
by Martin R. Echegoyen (1959-60), kept its alliance with Nardone's 
Ruralists. At the same time, divisions between the List 14 faction 
and Unity and Reform were intensified in the Colorado Party. 

Important changes also took place in the minor parties. Catho- 
lics formed the Christian Democratic Party (Partido Democrata 
Cristiano — PDC). Communists formed a coalition with other minor 
parties, the Leftist Liberty Front (Frente Izquierda de Libertad — 
Fidel). The PSU joined with intellectuals and dissidents from tradi- 
tional parties and formed the Popular Union (Union Popular). 

The thin majority of the governing party, as well as its internal 
divisions, hindered the administration of the National Council of 
Government during the 1963-67 period. In 1964 the political scene 
was further affected by the death of two important leaders: Batlle 
Berres and Nardone. That same year, the workers' movement 
formed a single centralized union, the National Convention of 
Workers (Convention Nacional de Trabaj adores — CNT). In addi- 
tion, a new political protagonist appeared. In 1962 Raul Antonaccio 
Sendic, head of the sugarcane workers from the north of the country, 
formed, together with other leftist leaders, the National Liberation 
Movement-Tupamaros (Movimiento de Liberation Nacional- 
Tupamaros — MLN-T), a clandestine urban guerrilla movement. 

Economically, the 1958 Blanco victory brought ranching and 
agricultural forces to power. This led to the implementation of 
liberal (free-market) economic policies aimed at eliminating the 
protectionist-interventionist model that had fostered industrial de- 
velopment. In 1960 Uruguay agreed to sign its first letter of intent 
with the IMF. The Blanco government devalued the currency and 
established a single, free monetary 7 exchange market (while main- 
taining the interventionist role of BROU), as well as the free im- 
port and export of goods and services. The reorientation of economic 
policy tended to favor the agro-exporting sector. However, the 
model could not be applied fully, nor in an orthodox manner. In- 
flation increased to more than 50 percent per year between 1963 
and 1967, and in 1965 an overstretched financial system and mas- 
sive speculation produced a banking crisis. Labor and social con- 
flict increased as well, and a state of siege was imposed in 1965. 

To try to solve the problem of economic stagnation, the govern- 
ment complied with one of the principal recommendations of the 



38 



Historical Setting 



Alliance for Progress (a United States program to help develop and 
modernize Latin American states) by preparing a ten-year develop- 
ment plan. However, virtually none of the plan's recommenda- 
tions were ever put into practice. 

During the Blanco era, sectors from both traditional parties had 
begun blaming the country's difficulties on the collegial constitu- 
tional arrangement of executive power. In the 1966 elections, three 
constitutional amendments were submitted. The approved changes, 
supported by Blancos and Colorados, were incorporated in the 1967 
constitution, which put an end to the collegial executive, thereby 
returning the country to a presidential regime; granted increased 
powers to the executive; and extended the presidential term to five 
years. They also eliminated the three-and-two (coparticipation) sys- 
tem for appointing heads of autonomous entities and ministries and 
created new state agencies to modernize government: the Office 
of Planning and Budget, the Social Welfare Bank, and the Cen- 
tral Bank of Uruguay. High school education became compulsory. 

Pachequism, 1967-72 

Given the growing economic and social crisis, it was not sur- 
prising that the Colorado Party won the November 1966 elections. 
In March 1967, General Oscar Gestido (1967), a retired army 
general who had earned a reputation as an able and honest ad- 
ministrator when he ran the State Railways Administration, be- 
came president. He was supported by the Colorado and Batllist 
Union (Union Colorada y Batllista — UCB), comprising List 14 and 
other conservative Colorados. 

Between June and November of 1967, the government, with the 
influence of some Batllists, attempted to reverse economic and social 
policies implemented since 1959 and to return to the old develop- 
mentalist model. But in November, Cesar Charlone, responsible 
for economic policies under Terra, became head of the Ministry 
of Economy and Finance. He agreed to the IMF's suggestions, 
again establishing a unified exchange market and drastically devalu- 
ing the currency. Inflation exceeded 100 percent in 1967, the highest 
in the country's history. 

In December President Gestido died and was succeeded by his 
vice president, Jorge Pacheco Areco (1967-72). A litde-known poli- 
tician and former director of the newspaper El Dia, Pacheco would 
leave an indelible mark on Uruguay. Within one week of taking 
office, Pacheco issued a decree banning the PSU and other leftist 
groups and their press, which he accused of subverting the constitu- 
tional order and advocating armed struggle. To implement the new 
monetarist policy adopted in 1968, Pacheco appointed Alejandro 



39 



Uruguay: A Country Study 

Vegh Villegas as director of the Office of Planning and Budget. 
In a sharp policy change, Pacheco decreed a wage and price freeze 
in June 1968 to try to control inflation. He also created the Produc- 
tivity, Prices, and Income Commission (Comision de Produc- 
tividad, Precios, e Ingresos — Coprin) to control the price of basic 
food items. In 1968 real wages were the lowest in the decade, and 
inflation reached a maximum annual rate of 183 percent that June. 

The newly created umbrella labor organization, the CNT, re- 
sisted these economic policies, and student and other social con- 
flict intensified. The government responded by repressing strikes, 
work stoppages, and student demonstrations. The death of a stu- 
dent, Liber Arce, during a protest paralyzed Montevideo, and re- 
lations between the University of the Republic and the government 
further deteriorated. "Prompt security measures," a limited form 
of a state of siege, which had been included in the constitution to 
deal with extraordinary disturbances of domestic order and applied 
in 1952 and 1965, were enforced during almost all of Pacheco' s 
time in office. He justified his actions, which included drafting strik- 
ing bank and government employees to active military service, on 
the basis of the growing urban guerrilla threat from the Tupamaros. 

During this period, the Tupamaros had grown in strength, and 
their actions — robberies, denunciations, kidnappings, and, even- 
tually, killings — shook the country and became known worldwide. 
The General Assembly acquiesced twice in the suspension of all 
civil liberties, once for twenty days following the assassination in 
August 1970 of Dan A. Mitrione, a United States security offi- 
cial, and then for forty days following the kidnapping of British 
ambassador Geoffrey Jackson in January 1971 — both by the 
Tupamaros. On September 9, 1971, after the escape from prison 
of more than 100 Tupamaros, Pacheco put the army in charge of 
all counter guerrilla activity. 

The November 1971 national elections were held in a relatively 
quiet atmosphere because of a truce declared by the Tupamaros. 
Uruguayan society had become polarized. Political sectors support- 
ing Pacheco promoted his reelection to a new presidential term, 
as well as the corresponding constitutional amendment to legitimize 
it. The left was able to unite and draw supporters from traditional 
parties, such as the Colorado Party's List 99. The new coalition 
was named the Broad Front (Frente Amplio). In the National Party, 
a faction of Herrerists chose General Mario Aguerrondo, consid- 
ered a hard-liner, as its presidential candidate. Liberal Blancos sup- 
ported the reformist program of a new movement, For the 
Fatherland (Por la Patria — PLP), led by Senator Wilson Ferreira 
Aldunate. 



40 



Historical Setting 



The constitutional amendment did not succeed, but Pacheco's 
handpicked successor, Juan Maria Bordaberry Arocena of the 
Colorado Party, won the controversial elections by some 10,000 
votes, after a mysterious halt in the vote count. It was noteworthy, 
however, that Ferreira obtained a large number of votes (he was 
actually the candidate receiving the most votes — 26 percent of the 
total to Bordaberry' s 24 percent), and the left increased its follow- 
ing, receiving about 18 percent of the votes. Bipartisan politics had 
come to an end, replaced by a multiparty system bitterly divided 
by political, social, economic, and ideological differences. In eco- 
nomic terms, the stabilization measures taken between 1969 and 
1971 by the Pacheco administration to increase wages and reduce 
inflation had been moderately successful. But by 1972, the situa- 
tion was out of control again. Another free-market, monetarist ex- 
periment would have to await the imposition of an authoritarian 
regime. 

The Emergence of Militarism, 1972-73 

In March 1972, Bordaberry was sworn in as president (1972-76). 
He ran as a Colorado, but he had been active in Nardone's Ruralist 
movement and had been elected to the Senate as a representative 
of the National Party. Bordaberry' s narrow victory forced him to 
seek the support of other political parties. He found it in Mario 
Aguerrondo's Herrerist faction of the National Party and in the 
Colorado Party's Unity and Reform, led by Jorge Badle Ibafiez, 
a son of Luis Batlle Berres, who had founded the faction. 

Bordaberry appointed Julio Maria Sanguinetti Cairolo, who 
headed a faction of Unity and Reform, as minister of education 
and culture. Sanguinetti promoted education reform that brought 
together primary, secondary, and vocational education under the 
National Council for Education (Consejo Nacional de Educacion — 
Conae) and established secret and mandatory voting for the elec- 
tion of university authorities. Unity and Reform also took charge 
of economic policy by implementing a five-year development plan 
inspired by neoliberal (free-market) and monetarist principles, 
which would slowly open the economy to greater influence from 
financial and commercial groups, as well as to foreign investment. 

The Bordaberry administration, however, continued its predeces- 
sor's policies, giving greater budgetary priority to the military than 
to education and other social areas. Bordaberry also proposed legis- 
lation to eliminate university autonomy and enhance the powers 
of the army and police. 

When the Tupamaros finally renewed their armed activities fol- 
lowing their six-month electoral truce from October 1971 to April 



41 



Uruguay: A Country Study 



1972, they faced a firmly entrenched administration backed by an 
increasingly well-equipped and adequately prepared military, which 
had a blank check to defeat them. In April 1972, after a bloody 
shoot-out with the Tupamaros, Bordaberry declared a state of 
' 'internal war. ' ' All civil liberties were suspended, initially for thirty 
days but later extended by the General Assembly until 1973. On 
July 10, 1972, the government enacted the draconian State Secu- 
rity Law. By the end of the year, the army had decisively defeated 
the Tupamaros, whose surviving members either were imprisoned 
or fled into exile. Despite their victory over the Tupamaros, the 
military had grown impatient with civilian rule. It was now time 
for the armed forces' final assault on the Uruguayan polity. 

The Military Government, 1973-85 
The New Situation, 1973-80 

In February 1973, a deep conflict emerged among the president, 
the General Assembly, and the armed forces. The army and air 
force rebelled against Bordaberry' s selection of a civilian as minister 
of national defense. On February 9 and 10, the army issued two 
communiques proposing a series of political, social, and economic 
measures. Initially, the navy maintained its loyalty to the presi- 
dent but subsequently joined the other military services. Bordaberry 
made an agreement with the military, known as the Boisso Lanza 
Pact, that guaranteed their advisory role and their participation 
in political decision making. In effect, the pact constituted a quasi- 
coup. The National Security Council (Consejo de Seguridad 
Nacional — Cosena) was created as an advisory body to the execu- 
tive. Its members included the commanders of the army, navy, 
and air force, plus an additional senior military officer, and the 
ministers of national defense, interior, and foreign affairs. 

The military then pushed for the final approval and implemen- 
tation of the State Security Law. However, differences with the 
General Assembly, which was investigating charges of torture com- 
mitted by the military and felt that the military had exceeded its 
powers, continued until June 27, 1973. On that date, with the back- 
ing of the armed forces, Bordaberry dissolved the General Assem- 
bly and replaced it with the Council of State, and he empowered 
the armed forces and police to take whatever measures were neces- 
sary to ensure normal public services. In essence, a de facto dic- 
tatorship had been announced. The new situation was supported 
by some Colorados (the Pachequist faction) and some Blancos 
(Aguerrondo's Herrerists). But the CNT called for the occupation 
of factories and a general strike that lasted almost two weeks. When 



42 



Historical Setting 



the civil-military dictatorship was consolidated, it banned the CNT, 
the PCU, and other existing and alleged Marxist-Leninist organi- 
zations, and it intervened in the university to quell dissident ac- 
tivities by the students. 

The military's "Doctrine of National Security" was a pseudo- 
scientific analysis of society grounded in geopolitics. It posited that 
sovereignty no longer resided in the people but derived instead from 
the requirements of state survival. This was basically the same ideol- 
ogy made famous by the Brazilian generals after their takeover in 
1964. The core of the doctrine was articulated by Brazil's General 
Artur Golbery do Couto e Silva in his book Geopolitica do Brasil. 
Essentially, the book described a world divided into two opposing 
blocs — the capitalist and Christian West and the communist and 
"atheistic" East — each with its own values that were considered 
irreconcilable. The Brazilian and Uruguayan generals saw them- 
selves as part of the Western bloc and were therefore engaged in 
an unrelenting global struggle with the opposition. This struggle 
called for a war in which there was no room for hesitation or un- 
certainty against a cunning and ruthless enemy. Thus, it was neces- 
sary to sacrifice some secular freedoms in order to protect and 
preserve the state. 

"Preventive" repression by the Uruguayan military regime was 
intense. To the dead and disappeared were added thousands of per- 
sons who went to jail because they were accused of politically moti- 
vated crimes. Many were tortured. Others were fired from their 
government jobs for political reasons. The regime restricted free- 
dom of the press and association, as well as party political activ- 
ity. Amnesty International calculated that in 1976 Uruguay had 
more political prisoners per capita than any other nation on earth. 
During these years, approximately 10 percent of Uruguay's popu- 
lation emigrated for political or economic reasons. 

In June 1976, Bordaberry was forced to resign after submitting 
a proposal to the military calling for the elimination of political 
parties and the creation of a permanent dictatorship with himself 
as president. National elections were to be held that year, although 
politicians could hardly be sanguine after the assassinations in 
Argentina of Uruguayan political leaders Hector Gutierrez Ruiz 
(National Party) and Zelmar Michelini (Broad Front). Bordaberry 
was replaced by Alberto Demichelli Lizaso, president of the Council 
of State, who, through Institutional Act No. 1, decreed the sus- 
pension of elections. Three months later, Demichelli was succeeded 
by Aparicio Mendez (1976-81), who essentially decreed the polit- 
ical prohibition of all individuals who had participated in the 1966 
and 1971 elections. Political life thus came to a halt. 



43 



Uruguay: A Country Study 



In 1977 the military government made public its political plans. 
Over the next few years, the National Party and the Colorado Party 
would be purged, a new constitution would be submitted to a 
plebiscite, and national elections would be held with a single can- 
didate agreed on by both parties. A charter that gave the military 
virtual veto power over all government policy was drawn up. In 
1980 the armed forces decided to legitimize themselves by submit- 
ting this constitution to a plebiscite. 

Opposing the constitutional project were Batlle Ibanez, Ferreira, 
Carlos Julio Pereyra, a Herrerist faction led by Luis Alberto Lacalle 
de Herrera, Pachequist dissidents, and the Broad Front, who con- 
sidered it authoritarian and in conflict with Uruguay's democratic 
tradition. When Uruguay's citizens went to the polls, they dealt 
the military regime a tremendous blow and rejected the proposed 
new constitution by 57 to 43 percent. 

The Military's Economic Record 

When the military took power in 1973, they did so in the face 
of a decade and a half of economic stagnation, high inflation, and 
increased social unrest. Massive repression brought the social un- 
rest under control and eliminated the urban guerrilla threat. Eco- 
nomic policy and performance soon became the regime's ultimate 
claim to legitimacy and justification for its harsh rule. The mili- 
tary and their civilian technocrats hoped to reverse Uruguay's 
economic stagnation, which had led to an absence of capital ac- 
cumulation and investment, as well as to capital flight. The disso- 
lution of the General Assembly and the banning of union 
organizations eliminated any possibilities for action by the oppo- 
sition and thus made possible a new economic model. The long- 
term model sought by the military involved a profound change in 
the traditional roles of the public and private sectors and the 
response of the public sector to the influence of the external market. 

The military's economic program sought to transform Uruguay 
into an international financial center by lifting restrictions on the 
exchange rate; ensuring the free convertibility of the peso and for- 
eign remittances, thus further "dollarizing" the economy; facilitat- 
ing the opening of branches of foreign banks; and enacting a law 
to promote foreign investment. More attention was paid to the in- 
ternational market. The reduction of import duties, promotion of 
nontraditional exports, integration of trade with Argentina and 
Brazil, and liberalization of the agricultural and livestock markets 
were key goals. Although proposals were made to reduce state inter- 
ventionism, the state participated actively in the preparation of the 
new program. 



44 



Historical Setting 



The principal architect of the program was Harvard- trained 
Alejandro Vegh Villegas, who had served as minister of economy 
and finance from 1974 to 1976. Vegh hoped to dismantle the pro- 
tectionist structure of the economy; free the banking and financial 
communities from the restraints under which they operated; cut 
the budget, especially social spending; reduce state employment; 
and sell off most of the state enterprises. However, some of the 
nationalist and populist military leaders opposed his plan for mass 
reductions in government employment and divestiture of state 
enterprises such as ANCAP. Vegh succeeded somewhat in his bud- 
getary and monetary objectives and managed to reduce some tariffs. 
Between 1975 and 1980, his strict monetary policy reduced infla- 
tion from 100 percent in 1972 to 40 to 67 percent in 1980, and 
by 1982 it was only 20 percent. He managed this by strict control 
of the social service side of the budget and by a policy of depressed 
real wages, which fell by 50 percent during the 1970s. 

Between 1974 and 1980, the gross domestic product (GDP — 
see Glossary) grew, although unevenly. Beginning in 1980, how- 
ever, the situation changed as the military's economic program 
began to unravel. High interest rates and recession in the United 
States did not help matters. Between 1981 and 1983, GDP fell some 
20 percent, and unemployment rose to 17 percent. The foreign 
debt burden, exacerbated by the quadrupling of oil prices in 1974, 
grew exponentially and stood at about US$3 billion by 1984. 

Industry and agriculture, whose accumulation of debt in dol- 
lars had been encouraged by official policies, were adversely af- 
fected by the government's elimination in November 1982 of its 
"crawling peg" system (a minidevaluation monetary policy) in 
effect since 1978. The progressively overvalued currency had limited 
the ability of domestic producers to raise prices to compete with 
cheaper imports. The resulting collapse of the Uruguayan new peso 
(for value of the Uruguayan new peso — see Glossary) bankrupted 
thousands of individuals and businesses. Industry was in better 
shape, although it had unused capacity and no substantial diver- 
sification had taken place. The financial sector, which was largely 
foreign owned, was consolidated and expanded at the same time. 
As the situation deteriorated, the state, in order to save the bank- 
ing system, purchased noncollectible debt portfolios of ranchers, 
industrialists, and importers, which were held by private banks. 
This adversely affected the fiscal deficit and increased the foreign 
debt, which grew sevenfold between 1973 and 1984 (see Restruc- 
turing under the Military Regime, 1973-85, ch. 3). 

The failure of the regime's economic model, combined with its 
stifling of political opposition, prompted thousands of Uruguay's 



45 



Uruguay: A Country Study 



best professionals to go into exile. By late 1983, Vegh returned from 
an ambassadorship in the United States to once again become 
minister of economy and finance. As the most important techno- 
crat to serve the military regime, he had returned to help smooth 
out the expected transition to civilian rule. He failed, however, to 
turn over a revived economy to a democratic government. The 
lack of success of the military's economic policies and their failure 
to achieve legitimacy or consensus led to a watering down of their 
own plan to reinstitute a civilian government under military 
tutelage. 

The Opposition and the Reemergence of Parties, 1980-84 

After the electoral defeat of the military's constitution, retired 
Lieutenant General Gregorio Alvarez Armelino (1981-85), one of 
the leaders of the coup, became president, and political dialogue 
was slowly restored. The 1982 Political Parties Law was enacted 
to regulate the election of political leaders, the functioning of po- 
litical conventions, and the preparation of political platforms. Its 
aim was the controlled regeneration and democratization of the 
political system, but it excluded the left to avoid a return to the 
situation prior to 1973. In 1982 the officials of the National Party, 
the Colorado Party, and the Civic Union (Union Civica — UC; 
created in 1971), a small conservative Catholic party, were elected. 
Once again, election results were a blow to the military. Sectors 
opposing the dictatorship won overwhelmingly in both traditional 
parties. A divided left, although officially banned, also participated: 
some cast blank ballots, while others believed it would be more 
useful to back the democratic sectors of traditional parties. 

The dialogue between politicians and the military gathered 
momentum but was marked by advances and setbacks and accom- 
panied by increasing civil resistance. Uruguay was now experienc- 
ing its worst economic crisis since the Great Depression. In 1983 
the Interunion Workers' Assembly (or Plenum) (Plenario Inter- 
sindical de Trabaj adores — PIT) reclaimed the banner of the CNT 
and was authorized to hold a public demonstration on May 1 ; it 
later assumed the name PIT-CNT to show its link with the earlier 
organization. Students — united under the Students' Social and Cul- 
tural Association for Public Education (Asociacion Social y Cul- 
tural de Estudiantes de la Ensenanza Publica — ASCEEP), heir to 
the banned student organizations — were allowed to march through 
the streets of Montevideo. In November all opposition parties in- 
cluding the left staged a massive political rally, demanding elec- 
tions with full restoration of democratic norms and without political 
proscriptions. 



46 



Historical Setting 



The Transition to Democracy, 1984-85 

In March 1984, the PIT-CNT organized a civil strike and freed 
General Liber Seregni Mosquera, leader of the Broad Front, whom 
the military had imprisoned since January 11, 1976. By mid- 1984 
yet another civil strike took place, this time organized by political 
parties and social groups. Blanco Senator Ferreira returned from 
exile. His subsequent imprisonment essentially deprived the Na- 
tional Party of the opportunity to participate in the meetings be- 
tween politicians and the military that ended with the Naval Club 
Pact. Signed by the armed forces and representatives from the 
Colorado Party, UC, and Broad Front, this pact called for national 
elections to be held that same year on the traditional last Sunday 
in November. 

The discussions at the Naval Club saw the military give up its 
long-sought goal of a Cosena dominated by the military and with 
virtual veto power over all civilian government decisions. The mili- 
tary now settled for an advisory board that would be controlled 
by the president and the cabinet. Some transitional features were 
agreed to by the civilian leadership, mostly relating to the ability 
of the armed forces to maintain its seniority system in the naming 
of the commanders of the various military services. The military 
also agreed to review the cases of all political prisoners who had 
served at least half of their sentences. Moreover, the military ac- 
quiesced to the relegalization of the left, although the PCU remained 
officially banned (until March 1985). The Communists were 
nonetheless able to run stand-in candidates under their own list 
within the leftist coalition. Nothing was said about the question 
of human rights violations by the dictatorship. 

The election results were no great surprise. With Ferreira pro- 
hibited from heading the Blanco ticket and a similar fate for Seregni 
of the Broad Front, and with effective use of young newcomers 
and a savvy media campaign, the Colorado Party won. The Colo- 
rados received 41 percent of the vote; the Blancos, 34 percent; and 
the Broad Front, 21 percent. The UC received 2.5 percent of the 
vote. Within the Broad Front's leftist coalition, social democratic 
Senator Hugo Batalla, who headed List 99, a faction started by 
Zelmar Michelini in 1971, was the big winner, garnering over 40 
percent of the alliance's vote. For the victorious Colorados, former 
President Pacheco brought the party 25 percent of its vote. 
However, the Colorado presidential ticket receiving the most votes 
(in a system that allowed multiple candidacies for president in each 
party) was headed by Sanguinetti. After being sworn in as president 
on March 1, 1985, Sanguinetti led the transition to democracy. 



47 



Uruguay: A Country Study 

He did so with dignity and fairness, although the legacy of human 
rights violations under the dictatorship proved a troublesome 
problem (see Democratic Consolidation, 1985-90, ch. 4). 

* * * 

Eduardo Acevedo's voluminous work Andes historicos del Uruguay, 
which starts in the sixteenth century and ends in 1930, provides 
a solid bibliographical background for both political and socio- 
economic changes. A more modern version, restricted to the 1851- 
1914 period, may be found in Jose Pedro Barran and Benjamin 
Nahum's Historia rural del Uruguay moderno. This seven- volume work 
contains an analysis of Uruguay's main sources of wealth, as well 
as a review of political events and social change. 

Historiographical production on Uruguay slowed down begin- 
ning in 1930, a fact demonstrated by a decrease in contemporary 
historical research. There are, however, short works covering the 
period from 1930 to the present: Raul Jacob's El Uruguay de Terra, 
1931-1938; Ana Frega, Monica Maronna, and Yvette Trochon's 
Baldomir y la restauracion democrdtica, 1938-1946; German D'Elia's 
El Uruguay neo-Batllista, 1946-1958; Rosa Alonso Eloy and Carlos 
Demassi's Uruguay, 1958-1968; Oscar Bruschera's Las decadas 
infames, 1967-1985; and Gerardo Caetano and Jose Pedro Rilla's 
Breve historia de la dictadura, 1973-1985. An excellent economic his- 
tory of Uruguay is M.H.J. Finch's A Political Economy of Uruguay 
since 1870. Useful English-language sources on contemporary Uru- 
guay include Martin Weinstein's Uruguay: The Politics of Failure and 
Uruguay: Democracy at the Crossroads. Although somewhat dated, 
Marvin Alisky's Uruguay: A Contemporary Survey and Russell H. Fitz- 
gibbon's Uruguay: Portrait of a Democracy also contain useful back- 
ground information. (For further information and complete 
citations, see Bibliography.) 



48 



Chapter 2. The Society and Its Environment 




Street of Sighs, a seventeenth-century historical site in Colonia del Sacramento 



URUGUAY WAS ONCE KNOWN as the "Switzerland of South 
America' ' as a result of its relative governmental stability, advanced 
level of economic development, and social peace. Indeed, in the 
creation of a welfare state, it was far ahead of Switzerland during 
the first half of the twentieth century. Starting in the 1950s, 
however, Uruguay's economy began to stagnate, and the once- 
vaunted welfare state became increasingly poor. Commentators 
talked of the "Latin Americanization" of Uruguay as it descended 
from the ranks of the developed nations to the level of the develop- 
ing nations. Political and social unrest eventually culminated in the 
military coup of 1973; by then the case for seeing Uruguay as very 
different from the rest of Latin America was largely undermined. 

During the sixty-year period from 1870 to 1930, foreign im- 
migrants flooded into Uruguay, mainly from Spain and Italy, to 
improve their standard of living. A historical study of social and 
economic development ranked Uruguay fourth among all indepen- 
dent nations in the world in the 1880s. In 1990 Uruguay's levels 
of education and nutrition were still among the highest in Latin 
America, as well as its per capita ownership of radios, televisions, 
and telephones and its newspaper readership. 

However, four decades of economic stagnation had seriously 
eroded Uruguay's lead in terms of per capita gross domestic product 
(GDP — see Glossary). Historically, only Argentina rivaled it in 
Latin America in terms of this crucial economic indicator. By the 
middle of the twentieth century, Uruguay had been overtaken by 
Venezuela in terms of per capita GDP, and in 1970 Chile had 
almost caught up. By 1980 so had Brazil, Costa Rica, Panama, 
and Mexico. 

A study published by the United Nations Development Pro- 
gramme (UNDP) in 1990 attempted to rank 130 countries of the 
world by their level of social (rather than purely economic) develop- 
ment. Switzerland was the richest nation as measured by per 
capita GDP, adjusted for purchasing power parities. Using the same 
indicator, Uruguay was ranked forty-fifth, underlining how far it 
had fallen economically. Nevertheless, Uruguay ranked far higher 
on a composite indicator of social progress dubbed by the UNDP 
the "Human Development Index." The index took into account 
life expectancy and level of literacy, as well as adjusted per capita 
GDP. By this measure, Uruguay ranked twenty-ninth, immedi- 
ately above Hungary. Only two Latin American countries scored 



51 



Uruguay: A Country Study 



higher on this index: Costa Rica (ranking twenty-eighth) and Chile 
(ranking twenty-fourth). In comparison, the United States ranked 
nineteenth. Japan had the highest Human Development Index of 
all. 

In sum, Uruguayan society in 1990 presented a contradictory 
picture of advanced social indicators and declining economic sta- 
tus. In many ways, it remained unlike other Latin American and 
developing countries. 

Geography 

Uruguay is located in the Southern Hemisphere on the Atlantic 
seaboard of South America between 53° and 58° west longitude 
and 30° and 35° south latitude (see fig. 1). It is bounded on the 
west by Argentina, on the north and northeast by Brazil, and on 
the southeast by the Atlantic Ocean. To the south, it fronts the 
Rio de la Plata, a broad estuary that opens out into the South 
Atlantic. Montevideo, the capital and major port, sits on the banks 
of the Rio de la Plata and is on approximately the same latitude 
as Capetown and Sydney. Uruguay is the smallest Spanish- speaking 
nation in South America with a land area of 176,220 square kilo- 
meters, slightly smaller than North Dakota. 

Topography and Hydrography 

Most of Uruguay is a gently rolling plain that represents a tran- 
sition from the almost featureless Argentine pampas to the hilly 
uplands of southern Brazil. The country itself has flat plains on 
its eastern, southern, and western edges. The narrow Atlantic 
coastal plain is sandy and marshy, occasionally broken by shallow 
lagoons. The littorals of the Rio de la Plata and the Rio Uruguay 
are somewhat broader and merge more gradually into the hilly 
interior (see fig. 3). 

The remaining three-quarters of the country is a rolling plateau 
marked by ranges of low hills that become more prominent in the 
north as they merge into the highlands of southern Brazil. Even 
these hilly areas are remarkably featureless, however, and eleva- 
tions seldom exceed 200 meters. 

Uruguay is a water- rich land. Prominent bodies of water mark 
its limits on the east, south, and west, and even most of the bound- 
ary with Brazil follows small rivers. Lakes and lagoons are numer- 
ous, and a high water table makes digging wells easy. 

Three systems of rivers drain the land: rivers flow westward to 
the Rio Uruguay, eastward to the Atlantic or tidal lagoons bor- 
dering the ocean, and south to the Rio de la Plata. The Rio Uru- 
guay, which forms the border with Argentina, is flanked by low 



52 



International boundary 

® National capital 
• Populated place 



20 40 Kilometers 



20 40 Miles 




mentation 
authoritative 



The Society and Its Environment 



banks, and disastrous floods sometimes inundate large areas. The 
longest and most important of the rivers draining westward is the 
Rio Negro, which crosses the entire country from northeast to west 
before emptying into the Rio Uruguay. A dam on the Rio Negro 
at Paso de los Toros has created a reservoir — the Embalse del Rio 
Negro — that is the largest artificial lake in South America. The 
Rio Negro's principal tributary and the country's second most 
important river is the Rio Yi. 

The rivers flowing east to the Atlantic are generally shallower 
and have more variable flow than the other rivers. Many empty 
into lagoons in the coastal plain. The largest coastal lagoon, Laguna 
Merin, forms part of the border with Brazil. A half-dozen smaller 
lagoons, some freshwater and some brackish, line the coast far- 
ther south. 

Climate 

Located entirely within the temperate zone, Uruguay has a cli- 
mate that is fairly uniform nationwide. Seasonal variations are 
pronounced, but extremes in temperature are rare. As would be 
expected by its abundance of water, high humidity and fog are com- 
mon. The absence of mountains, which act as weather barriers, 
makes all locations vulnerable to high winds and rapid changes in 
weather as fronts or storms sweep across the country. 

Seasons are fairly well defined, and in most of Uruguay spring 
is usually damp, cool, and windy; summers are warm; autumns are 
mild; and winters are chilly and uncomfortably damp. Northwestern 
Uruguay, however, is farther from large bodies of water and there- 
fore has warmer summers and milder and drier winters than the 
rest of the country. Average highs and lows in summer (January) 
in Montevideo are 28°C and 17°C, respectively, with an absolute 
maximum of 43 °C; comparable numbers for Artigas in the north- 
west are 33°C and 18°C, with the highest temperature ever recorded 
42 °C. Winter (July) average highs and lows in Montevideo are 14°C 
and 6°C, respectively, although the high humidity makes the tem- 
peratures feel colder; the lowest temperature registered in Monte- 
video is -4°C. Averages in July of a high of 18°C and a low of 7°C 
in Artigas confirm the milder winters in northwestern Uruguay, but 
even here temperatures have dropped to a subfreezing -4°C. 

Rainfall is fairly evenly distributed throughout the year, and 
annual amounts increase from southeast to northwest. Montevideo 
averages 950 millimeters annually, and Artigas receives 1,235 milli- 
meters in an average year. As in most temperate climates, rainfall 
results from the passage of cold fronts in winter, falling in over- 
cast drizzly spells, and summer thunderstorms are frequent. 



55 



Uruguay: A Country Study 

High winds are a disagreeable characteristic of the weather, par- 
ticularly during the winter and spring, and wind shifts are sudden 
and pronounced. A winter warm spell can be abruptly broken by 
a strong pampero, a chilly and occasionally violent wind blowing 
north from the Argentine pampas. Summer winds off the ocean, 
however, have the salutary effect of tempering warm daytime tem- 
peratures. 

Land Use and Settlement Patterns 

Uruguay may be divided into four regions, based on social, eco- 
nomic, and geographical factors. The regions include the interior, 
the littoral, Greater Montevideo, and the coast. 

The Interior 

This largest region includes the departments of Artigas, Cerro 
Largo, Durazno, Flores, Florida, Lavalleja, Rivera, Salto, Tacua- 
rembo, and Treinta y Tres and the eastern halves of Paysandu, 
Rio Negro, and Soriano. The topsoil is thin and unsuited to inten- 
sive agriculture, but it nourishes abundant natural pasture. 

Only 2 to 3 percent of Uruguay's land is forested. An estimated 
3 to 4 million hectares (17 to 23 percent of the total land) are arable, 
but only one-third of this (about 7 percent of the total productive 
land) was cultivated in 1990. Almost all of the interior consisted 
of cattle and sheep ranches; pasture accounted for 89 percent of 
the country's productive land. 

Sheep rearing was typically undertaken on medium-sized farms 
concentrated in the west and south. It began to boom as an export 
industry in the last quarter of the nineteenth century, particularly 
following the invention of barbed wire, which allowed the easy en- 
closure of properties. Uruguayan wool is of moderate quality, not 
quite up to Australian standards (see Livestock Ranching, ch. 3). 

Cattle ranches, or estancias, for beef and hides were typically quite 
large (over 1,000 hectares) and were concentrated in the north and 
east. (Dairying was concentrated in the department of Colonia.) 
Because ranching required little labor, merely a few gauchos, the 
interior lacked a peasantry and large towns. Despite being sparsely 
populated, however, the interior was relatively urbanized in that 
the capital of each department usually contained about half the 
inhabitants. Social and economic development indicators were 
lowest for the departments along the Brazilian border to the north- 
east. Government attempts to encourage agricultural colonization 
by means of land reform in the interior had largely failed in eco- 
nomic terms, as had the promotion of wheat production. One ex- 
ception, rice, most of which was produced in the east, had become 



56 



The Society and Its Environment 



a major nontraditional export in recent years (see Crop Produc- 
tion, ch. 3). 

The Littoral 

Stretching west along the Rio de la Plata from Montevideo are 
the agricultural and dairying departments of San Jose and Colo- 
nia. To the north along the Rio Uruguay lie the departments of 
Soriano, Rio Negro, and Paysandu. Their western halves form part 
of the littoral, a region that is somewhat more developed than the 
interior. Here soils are alluvial and more fertile, favoring crop 
production and farms of more modest size than in the interior. 
Citrus cultivation for export has increased in the departments along 
the Rio Uruguay. The department of Colonia, some of which was 
settled by the Swiss, was famous for the production of milk, but- 
ter, cheese, and dulce de leche (a dessert made from concentrated 
milk and sugar). Most wheat (in which Uruguay was self-sufficient) 
also was produced in this region. 

Construction with Argentina of the Salto Grande Dam across 
the Rio Uruguay north of Salto was a major boost to the develop- 
ment of the northern littoral in the 1970s. By contrast, the closure 
of the famous meat-packing plant at Fray Bentos in the depart- 
ment of Rio Negro transformed it into a virtual ghost town. Far- 
ther south, the littoral economy had benefited from completion of 
the General Artigas Bridge across the Rio Uruguay from Paysandu 
to the Argentine province of Entre Rios. However, the advent of 
a convenient (if circuitous) land route from Montevideo to Buenos 
Aires via the new bridge reduced freight and passenger traffic 
through the small port of Colonia on the Rio de la Plata just oppo- 
site the Argentine capital. To compensate, the Uruguayan govern- 
ment encouraged the architectural restoration of Colonia, which 
was originally built by the Portuguese in colonial times. By 1990 
Colonia had became one of Uruguay's most historic tourist attrac- 
tions, and many of its houses had been bought by vacationers from 
Buenos Aires. 

Greater Montevideo 

According to the 1985 census, the population of the department 
of Montevideo was 1,311,976, and that of the neighboring depart- 
ment of Canelones was 364,248, out of a total population of 
2,955,241. Thus, these departments and the eastern portion of San 
Jose, which together constituted the Greater Montevideo region, 
held over one-half of Uruguay's population. This monocephalic 
pattern of settlement was more pronounced in Uruguay than in 
any other nation of the world, barring city-states. The 1985 census 



57 



Uruguay: A Country Study 



DEPARTMENT 



MONTEVIDEO 



CANELONES 



COLONIA 
MALDONADO 
SAN JOSE 



PAYSANDU 
RIVERA 
SALTO 
SORIANO 

ARTIGAS 
CERRO LARGO 
FLORIDA 
LAVALLEJA 
ROCHA 

DURAZNO 
FLORES 
RIO NEGRO 
TACUAREMB6 
TREINTA YTRES 




y///////A 



80 



19 



i i i 1 1| 1 1 i I i i 1 1 | r— t — I— r 

10 100 
INHABITANTS PER SQUARE KILOMETER 



2.475 



TT I 

1,000 2,500 



Source: Based on information from Uruguay, Direccion General de Estadfstica y Censos, 
Anuario estadistico, 1988, Montevideo, 1989. 



Figure 4. Average Population Density by Department, 1985 

indicated a population density of about 2,475 inhabitants per square 
kilometer in the department of Montevideo and about 80 inhabi- 
tants per square kilometer in the department of Canelones. Densities 
elsewhere in the country were dramatically lower (see fig. 4; table 2, 
Appendix). 

Montevideo was originally founded on a promontory beside a 
large bay that forms a perfect natural harbor. In the nineteenth 
century, the British promoted it as a rival port to Buenos Aires. 
The city has expanded to such an extent that by 1990 it covered 
most of the department. The original area of settlement, known 
as the Old City, lies adjacent to the port, but the central business 
district and the middle-class residential areas have moved eastward. 
The only exception to this pattern of eastward expansion is that 
banking and finance continued to cluster in the Old City around 



58 



The Society and Its Environment 



the Stock Exchange, the Bank of Uruguay (Banco de la Republica 
Oriental del Uruguay — BROU), and the Central Bank of Uruguay. 

Since the 1950s, Montevideo's prosperous middle classes have 
tended to abandon the formerly fashionable downtown areas for 
the more modern high-rise apartment buildings of Pocitos, a beach- 
front neighborhood east of the center. Still farther east lies the 
expensive area of Carrasco, a zone of modern luxury villas that 
has come to replace the old neighborhood of El Prado in the north 
of the city as home to the country's wealthy elite. Its beaches were 
less polluted than those closer to the center. Montevideo's Carrasco 
International Airport is located there. The capital's principal artery, 
18th of July Avenue, was long the principal shopping street of 
Montevideo, but it has been hurt since the mid-1980s by the con- 
struction of a modern shopping mall strategically located between 
Pocitos and Carrasco. 

Montevideo's poorer neighborhoods tended to be located in the 
north of the city and around the bay in the areas of industrial 
activity. However, the degree of spatial separation of social classes 
was moderate by the standards of other cities in South America. 
Starting in the 1970s, the city began to acquire a belt of shantytowns 
around its outskirts, but in 1990 these remained small compared 
with Rio de Janeiro or Guayaquil, for example. About 60,000 fam- 
ilies lived in such shantytowns, known in Uruguay as cantegriles. 
An intensive program of public housing construction was under- 
taken in the 1970s and 1980s, but it had not solved the problem 
by 1990. 

In 1990 Greater Montevideo was by far the most developed 
region of Uruguay and dominated the nation economically and cul- 
turally. It was home to the country's two universities, its principal 
hospitals, and most of its communications media (television stations, 
radio stations, newspapers, and magazines). Attempts by the mili- 
tary governments from 1973 to 1985 to promote the development 
of the north of the country (partly for strategic reasons) failed to 
change this pattern of extreme centralization. In one way, however, 
they achieved a major success: the introduction of direct dialing 
revolutionized the country's long-distance telephone system. By 
contrast, the local telephone network in Montevideo remained so 
hopelessly antiquated and unreliable that many firms relied on 
courier services to get messages to other downtown businesses. 

Until the construction boom of the late 1970s, relatively few 
modern buildings had been constructed. In many parts of the center, 
elegant nineteenth-century houses built around a central patio were 
still to be seen in 1990. In some cases, the patio was open to the 
air, but in most cases it was covered by a skylight, some of which 



59 



Uruguay: A Country Study 

were made of elaborate stained glass. Few of these houses were 
used for single-family occupancy, however, and many had been 
converted into low-cost apartments. 

The middle classes preferred to live in more modern apartments 
near the city center or the University of the Republic. Alterna- 
tively, they might purchase a single-family villa with a small yard 
at the back. Many of these were close to the beaches running east 
from the downtown along the avenue known as the Rambla. In 
Pocitos, however, high-rise apartments had replaced the single- 
family homes on those streets closest to the beach. 

The Coast 

Stretching east from Montevideo along the Rio de la Plata are 
the departments of Canelones, Maldonado, and Rocha. The in- 
land portion of Canelones is an area of small farms and truck 
gardens, which produce vegetables for the capital. It was relatively 
poor in 1990. Many inhabitants of the department's small towns 
also commuted to jobs in Montevideo by express bus. Along the 
coast lie a string of small seaside towns (balnearios), from which more 
prosperous employees had also begun to commute. Farther east 
in the highly developed department of Maldonado lies the major 
resort of Punta del Este. This has been developed as a fashionable 
playground more for Argentines than for average Uruguayans, who 
found it too expensive. With its hotels, restaurants, casino, and 
nightclubs, Punta del Este was a major export earner, and it domi- 
nated Uruguay's tourism industry (see Tourism, ch. 3). 

Vacationing Uruguayans of more modest means were concen- 
trated in smaller resorts such as Piriapolis and Atlantida, which 
are closer to Montevideo. Beyond Punta del Este in the still most- 
ly undeveloped department of Rocha, a number of communities 
had sprouted along the unspoiled Atlantic coast with its miles of 
sandy beaches and huge breakers. These small vacation com- 
munities — such as Aguas Dulces and Cabo Polonio, both in Rocha 
Department — were entirely unplanned and lacked essential ser- 
vices. In many cases, simple holiday chalets had been built on public 
property adjoining the seashore without any legal title to the land. 
In 1990 the authorities in Rocha Department announced plans to 
regulate and improve this development in hopes of encouraging 
visits by higher- spending tourists. 

Regional Development 

Uruguay's regions differed markedly not only in population size 
and density but also in their indexes of social and economic 
development, including education, health care, communications, 



60 




61 



Uruguay: A Country Study 



energy consumption, and industrialization. Least developed were 
the northern ranching departments along the Brazilian border — 
Artigas, Rivera, and Cerro Largo — and also Tacuarembo. Some- 
what more developed was a band of six departments stretching 
across the center of the country, from west to east: Rio Negro, 
Flores, Florida, Durazno, Treinta y Tres, and Rocha. More in- 
dustrialized and urbanized, but still quite poor, were the depart- 
ments of Soriano and Salto, which, as noted previously, benefited 
from the construction of a bridge and a dam, respectively, across 
the Rio Uruguay in the late 1970s and early 1980s. The two re- 
maining western departments — Colonia and Paysandii — were the 
most developed of the littoral. 

Three departments close to Montevideo — San Jose, Canelones, 
and Lavalleja — presented a contradictory picture of relatively 
advanced economic development combined with low indexes of 
social modernization. Finally, Montevideo and the department of 
Maldonado (which is strongly affected by the tourism industry in 
Punta del Este) had the highest indexes of social and economic 
development in the country (see table 3, Appendix). 

Population 

In 1988 Uruguay's population was estimated at 3,081,000, up 
somewhat from the 2,955,241 inhabitants recorded in the 1985 
census. From 1981 to 1988, the population growth rate averaged 
about 0.7 percent per year. In South America, only Guyana and 
Suriname had a lower growth rate. According to projections, the 
growth rate would continue in the 0.6 to 0.7 range through the 
year 2020, resulting in an estimated total population of 3,152,000 
in 1995, 3,264,000 in 2000, and 3,679,000 in 2020 (see table 4, 
Appendix). 

A major factor in Uruguay's low population growth rate was 
its relatively low birth rate. The average birth rate for 1990 was 
the lowest in Latin America at just 17 per 1,000 inhabitants. Sig- 
nificant levels of emigration also inhibited the growth of the popu- 
lation. At the same time, the average life expectancy of Uruguayans 
(seventy years for men and seventy-six years for women in 1990) 
was relatively high. Together, the comparatively low birth rate, 
net emigration, and long life expectancy gave Uruguay an aging 
population with a pyramidal structure more typical of a developed 
country than of a developing country (see fig. 5). 

In addition to its remarkably low population growth rate, low 
birth rate, high life expectancy, and aging population, Uruguay 
also was notable for its extremely high level of urbanization. Ac- 
cording to the 1985 census, 87 percent of Uruguay's population 



62 



The Society and Its Environment 



could be classified as urban. Moreover, this trend was expected 
to continue because the urban population was continuing to grow 
at a faster rate than the population as a whole, while the rural popu- 
lation growth rate was well under that for the total population. In 
the 1981-88 period, Uruguay's urban population grew at a rate 
of 0.9 percent, while its rural population grew at a rate of only 
0.3 percent (as compared with a total population growth rate of 
0.7 percent). 

Ethnically, Uruguay enjoyed a high level of homogeneity. Its 
population was estimated to be nearly 90 percent white, having 
descended from the original Spanish colonists as well as from the 
many European immigrants, chiefly from Spain and Italy, who 
flocked to Uruguay in the late nineteenth and early twentieth cen- 
turies. (The remainder were primarily black and mestizo, or peo- 
ple of mixed Indian and European ancestry.) 

Historical Patterns of Settlement 

First administered from Buenos Aires, Uruguay came into being 
as an independent nation in 1828 when the British intervened to 
create a buffer (and client) state between Argentina and Brazil. 
The fact that Uruguay was scarcely settled beyond a thin coastal 
strip during the colonial period meant that unlike many other areas 
of Latin America, little of its colonial heritage survived. The Brit- 
ish dominated the country's economic and commercial develop- 
ment until World War I. In marked distinction to Chile's or Peru's 
minerals, however, Uruguay's prime productive asset (land) re- 
mained in the hands of Uruguayans, or at least settlers who wanted 
to become Uruguayans. 

Shordy after independence, civil war broke out between the two 
political factions that came to form Uruguay's traditional parties, 
the Colorado Party (Partido Colorado) and the National Party (Par- 
tido Nacional, usually referred to as the Blancos). Military con- 
flicts between caudillos on both sides were to recur frequently until 
1904. The main cause of conflict was the rivalry between center 
and periphery: in Montevideo the Colorados predominated, but 
in the interior the Blancos wished to preserve their control. A dic- 
tatorship by a Colorado caudillo, Lorenzo Latorre (1876-80), im- 
posed strict order in the countryside. Concurrently, Uruguay's 
exports of beef products and wool to Europe began to boom. 

After 1911 massive growth of frozen meat exports revived the 
profitability of the large cattle ranches that had been somewhat 
eclipsed after the 1860s by medium- sized sheep farms. By World 
War I, two- fifths of the nation's farmland was in the hands of large 
landowners (the 3 to 4 percent of proprietors who had over 2,000 



63 



Uruguay: A Country Study 




Source: Based on information from Uruguay, Direccion General de Estadfstica y Censos, 
Anuario estadistico, 1988, Montevideo, 1989. 



Figure 5. Population by Age and Sex, 1985 

hectares). However, historians have argued that Uruguay's rural 
society was "pluralist" in character. Thus, along with the big land- 
owners {latifundistas) and smallholders (minifundistas), a middle sector 
had arisen, constituting 40 percent of the proprietors and accounting 
for 55 percent of the land. 

Contemporary Ethnic Composition 

In 1990 about 88 percent of Uruguay's population was white 
and descended from Europeans, and the nation has always looked 
to Europe for its cultural cues. Eight percent of the population was 
mestizo, and 4 percent was black. Although in 1990 Uruguay had 
an aging population, it was once a young nation of immigrants. 
According to the 1908 census, over two-fifths of the population was 
foreign born. While the descendants of the original Spanish colonists 



64 



The Society and Its Environment 



(known as criollos) predominated in the interior, the origins of the 
population were varied in the densely populated areas of Monte- 
video and the coast. In these areas, citizens of Italian descent were 
particularly numerous, constituting as much as one-third of the 
population. 

In 1990 estimates of the number of Uruguayans of African de- 
scent ranged from as low as 40,000 to as high as 130,000 (about 
4 percent). In Montevideo, many of them traditionally made a living 
as musicians or entertainers. Few had been allowed to achieve high 
social status. As many as three-quarters of black women aged eigh- 
teen to forty were employed in domestic service. In the interior, 
citizens of African or mixed descent were concentrated along the 
Brazilian border. Early in the twentieth century, the traditional 
folkways of Afro-Uruguayans were captured in the impressionist 
paintings of Pedro Figari. Although vestiges of African culture sur- 
vived in the annual carnival celebrations known as the Llamadas, 
Uruguay's black population was relatively assimilated in 1990. 

Uruguay's Indian population had virtually disappeared and was 
no longer in evidence in 1990. Even the mestizo, or mixed-race, 
population was small — 8 percent — by Latin American standards. 
In 1990 signs of intermarriage between whites and Indians were 
common only in the interior. The slightly derogatory term chino 
was still applied by the inhabitants of Montevideo to the somewhat 
darker- skinned migrants from the interior. 

Montevideo also had a highly assimilated Jewish population of 
some importance. Estimated at 40,000 in 1970, the Jewish com- 
munity had fallen to about 25,000 by the late 1980s as a result of 
emigration, particularly to Israel. Anti-Semitism was not uncom- 
mon, but it was less virulent than, for example, in Argentina. 

Fertility, Mortality, and Population Growth 

Uruguay's population has grown slowly throughout its history, 
reaching the 1 million mark early in the twentieth century. In the 
twentieth century, the rate of population growth declined stead- 
ily, however, despite significant amounts of immigration and vir- 
tually halted in the 1950s. Registered at over 2 percent in 1916, 
the annual growth rate had dropped to 1 .4 percent by 1937. It con- 
tinued in the 1.2 to 1.5 percent range until 1960, but in the 1960s 
population growth averaged only 1 percent annually. In the 1970s, 
the average annual growth rate was even lower, at 0.4 percent. 
In the 1981-88 period, annual population growth was 0.7 percent, 
but in 1990 it was 0.6 percent. 

A major contributor to the slow population growth rate was 
Uruguay's low, and declining, crude birth rate. It fell steadily 



65 



Uruguay: A Country Study 

throughout the first half of the twentieth century, from 38.9 per 
1,000 population in the 1900-04 period to 21.1 per 1,000 in the 
1945-49 period, where it more or less stabilized through the 
mid-1960s. In the 1980-85 period, the birth rate was 19.5 per 1,000. 
In 1987 it was estimated at 17.5, and in 1990 it was estimated at 
17 per 1,000. (In comparison, the birth rates for Argentina, Brazil, 
and the United States in 1990 were 20 per 1,000, 26 per 1,000, 
and 15 per 1,000, respectively.) This relatively low birth rate was 
usually ascribed to Uruguay's prosperity and the widespread avail- 
ability of contraception. Given the secularization of Uruguayan 
society at the beginning of the twentieth century, the influence of 
the Roman Catholic Church was minor (see Religion, this ch.). 
The total fertility rate in 1990 was 2.4 children born per woman. 

The crude death rate, which had averaged 14 to 15 per 1,000 
since the 1895-99 period, began to decline significantly starting 
in the 1920s. In the 1940s, it reached 10 per 1,000, and it has stayed 
at approximately this level ever since. In 1987 the crude death rate 
was estimated at 9.5 per 1,000 and in 1990 at 10 per 1,000. 

Advances in medicine resulted in longer life expectancy. Uru- 
guay's General Directorate of Statistics and Census noted that over- 
all life expectancy in the 1984-86 period was 71.6 years (68.4 years 
for men and 74.9 years for women). Estimates in 1990 placed life 
expectancy for males at seventy years and that for females at 
seventy-six years. Because Uruguayans were living longer, the 
population began to age. By the census year of 1963, demographers 
already were beginning to worry that the rising proportion of the 
population in retirement might overstrain the country's social secu- 
rity system (see Social Security Pensions, this ch.). The 1975 and 
1985 censuses confirmed the acceleration of this aging trend. The 
trend was aggravated as net immigration, which had character- 
ized Uruguay in the early twentieth century, gave way to net 
emigration and the exodus in particular of young, well-educated 
Uruguayans. 

Urbanization 

In the nineteenth century, Uruguay was already highly ur- 
banized. But in the twentieth century, it has been one of the world's 
most urbanized states. According to the 1985 census, 87 percent 
of Uruguayans lived in urban areas, the highest percentage in Latin 
America. The department of Montevideo alone accounted for 44 
percent of the country's population; the department of Canelones 
accounted for another 12 percent. Furthermore, the interior of Uru- 
guay, although sparsely populated, was also quite urban. Census 
figures from 1985 indicate that even outside Montevideo over 80 



66 



A flea market in Montevideo 
Courtesy Edmundo Flores 

percent of the country's inhabitants could be classified as * 'urban," 
i.e., living in towns of 2,000 inhabitants or more. Most of these 
townspeople lived in the departmental capitals. 

Uruguay's level of urbanization seemed likely to continue to rise, 
based on estimates of the growth rate of the urban population vis- 
a-vis that of the population as a whole and that of the rural popu- 
lation. During the 1960s, the urban population grew at an annual 
rate of 1.7 percent, while the overall population growth rate was 
only 1.0 percent. In the 1970s, the growth rates were 0.6 and 0.4 
percent, respectively. For the 1981-88 period, the overall popula- 
tion growth rate was 0.7 percent, while the urban population grew 
by 0.9 percent and the rural population by only 0.3 percent. 

Migration 

Rural depopulation has been a striking trend in Uruguay dur- 
ing the twentieth century. According to the 1975 census, one-fifth 
of those citizens born in the eighteen interior, littoral, and coastal 
departments lived in Montevideo. The departments that produced 
the highest flow of outward migration between the 1963 and 1975 
censuses were in the interior of the country. In the littoral and 
coastal departments (except the department of Rocha), the greater 
net retention of population correlated with the growth of the local 



67 



Uruguay: A Country Study 



urban population. This showed that people tended to stay in the 
department where they were born if there were local towns to which 
they could move. Otherwise, they moved farther afield. 

Migration in Uruguay thus appeared to follow the classic pat- 
tern by which those born in isolated rural areas moved to the nearest 
towns, whereas those born in interior towns headed for Montevideo. 
Montevideans, in turn, sought to migrate to large cities in Latin 
America, notably Buenos Aires, where their accents and customs 
blended successfully and where wages were much higher on average. 

Emigration 

Since the 1950s, Uruguay's traditional pattern of net immigra- 
tion has given way to a severe pattern of emigration, which has 
been of concern to the authorities. This was particularly worrisome 
because those most likely to leave were the youngest and best- 
educated citizens. The emigration of youth and the country's aging 
population had created a very high dependency ratio and serious 
difficulties for Uruguay's social security system. A famous piece 
of black-humored graffiti in the port of Montevideo in the early 
1970s read: "Last one to leave, please turn off the lights!" Esti- 
mates of emigration as high as one-third of the population have, 
however, been wildly exaggerated. 

Economics motivated emigration in the 1960s, but political 
repression became a major factor during the 1973-85 military re- 
gime. Official figures suggest that 180,000 people left Uruguay from 
1963 to 1975. In 1973 about 30,000 left, in 1974 nearly 60,000, 
and in 1975 nearly 40,000. According to the General Directorate 
of Statistics and Census, 150,000 Uruguayans left the country be- 
tween 1975 and 1985. By 1989 only 16,500 of them had returned. 
If the 180,000 who left between 1963 and 1975 are added, the propor- 
tion of the population that emigrated from 1963 to 1985 can be es- 
timated at about one- tenth. Along with the low birth rate, this is 
the major explanation for the country's low population growth rate. 

Most of the emigrants were young. Of those who emigrated be- 
tween 1963 and 1975, 17.7 percent were aged fourteen or younger, 
68 percent were between the ages of fifteen and thirty-nine, and 
only 14.3 percent were forty years or older. Those leaving were 
on average also better educated than the total population. Only 
1 .5 percent were uneducated, 52. 1 percent had completed primary 
school, 33.6 percent had attended secondary school or teachers' 
training colleges, and 12.8 percent had attended university or tech- 
nical college. 

In the late 1980s, the lack of jobs for young people was again 
a fundamental factor contributing to emigration. Those people 



68 



The Society and Its Environment 



leaving Uruguay were not only younger and better educated than 
the population as a whole but also tended to have more job skills. 
Among those aged fourteen and older who emigrated from 1 963 to 
1975 and who were economically active, the relative proportions of 
different occupations were as follows: professionals, technicians, man- 
agers, and administrators made up 12.8 percent, 2.9 percentage 
points higher than in the economically active population (EAP) as 
a whole in 1975; office employees constituted 16 percent of those emi- 
grating, 4.3 points above their share of the EAP; salespeople made 
up 12.4 percent of emigrants, 2 points above the EAP; and drivers, 
skilled and unskilled workers, and day laborers constituted 34.2 per- 
cent of the EAP in 1975, but 47.6 percent of those emigrating. 

On the one hand, the proportion of emigrants who had worked 
as domestic servants was 10.4 percent, close to their share of the 
EAP. On the other hand, whereas 18.2 percent of the EAP was 
classified as farmers and fishermen in 1975, these made up only 
0.8 percent of those leaving the country in the previous twelve years. 

By far the most popular destination for Uruguayan emigrants 
was Argentina, which in the first half of the 1970s took over one- 
half of the emigrants. Also important were the United States and 
Australia, followed by Spain, Brazil, and Venezuela. Small num- 
bers of artists, intellectuals, and politicians experiencing persecu- 
tion emigrated to Western Europe, notably to the Netherlands and 
Spain. Many of these political exiles, however, chose to return to 
Uruguay after 1984. 

The Uruguayan community in Argentina was officially given 
as 58,000 in 1970 but was actually much larger. Many Uruguayans 
in Argentina returned to Montevideo at election time to vote. Po- 
litical exiles were allowed to return to Uruguay after 1984, but many 
of them found it difficult to make a living. This was even true in 
those cases where they had the right to return to former govern- 
ment posts, for example in education. Often they expressed shock 
at the decay of public services and the dilapidated state of build- 
ings compared with their memories of Montevideo. 

Social Classes 

By Latin American standards, Uruguay is a relatively egalitar- 
ian society with a large middle class. One factor that historically 
helped the country avoid social polarization was the broad provi- 
sion of free public education by the state starting in the 1870s. Eco- 
nomic stagnation since the 1950s has reduced the opportunities for 
upward social mobility, but the incidence of extreme wealth and 
poverty still approximated the pattern of developed countries rather 
than that of developing countries. 



69 



Uruguay: A Country Study 



Uruguay's upper classes consisted of ranchers, businessmen, and 
politicians. The middle classes included professionals, white-collar 
workers, small businessmen, and medium-sized farmers. The lower 
classes consisted of blue-collar workers, domestic workers, a small 
number of peasants, and those forced to survive precariously in 
the informal sector of the economy. 

Estimates of the proportion of different sectors of the popula- 
tion in each class are by definition arbitrary. The upper classes 
are conventionally held to constitute 5 percent of the citizenry, but 
the relative sizes of the middle and lower classes have been much 
debated. In the 1950s, mainstream sociologists estimated that the 
middle classes constituted as much as two-thirds of the population. 
More radical writers in the 1960s suggested a figure as low as one- 
third. A reasonable figure, however, would be 45 percent, a propor- 
tion broadly consistent with the occupational structure revealed by 
census data. This left half the population in the lower-class category, 
although it must be stressed that class differences in Uruguay were 
far less pronounced than in much of Latin America. 

The Ranching Elite 

Compared with their counterparts on the Argentine pampas, 
Uruguay's latifundistas (large landholders) never achieved the same 
level of social and political preeminence. Constituting a tiny frac- 
tion of the population, they nevertheless controlled the bulk of the 
nation's land, which they typically used for cattle and sheep ranch- 
ing (see Land Use and Tenure, ch. 3). Intermarriage with newer 
urban commercial elites was common, but many of the ranchers 
descended from colonial Spanish settlers. Those who could afford 
it ran their ranches as absentee landlords, spending as much of 
the year as possible in Montevideo. Their children were tradition- 
ally educated in private schools, which were either Roman Catholic 
or English-speaking schools. Originally founded for the children 
of expatriates, the latter institutions continued to model themselves 
on Britain's elite private schools. 

For the ranchers, the social event of the year was the annual 
agricultural show at the Prado, a park in Montevideo, where prizes 
were awarded for the best breeds of cattle and sheep and where 
the latest farm machinery was displayed. Politically, the ranchers 
were organized in the Rural Federation (Federation Rural), which 
acted as a pressure group for their interests. Because the incomes 
of the ranchers varied with the profitability of beef and wool ex- 
ports, they were constantiy lobbying the government for favorable 
tax and exchange-rate policies. Under military rule from 1973 to 
1985, they were deprived of much of their influence, and thus many 



70 



The Society and Its Environment 



of them turned against the government. Historically, the majority 
of ranchers voted for the National Party rather than the Colorado 
Party. However, the distinction has tended to break down. One 
factor in this breakdown was the emergence in the 1950s of a non- 
party Ruralist movement called the Federal League for Rural Action 
(Liga Federal de Accion Rural — LFAR), which allied with differ- 
ent parties in successive elections. 

Uruguay's rural society remained much more rigidly hierarchi- 
cal than its urban society, and status differences were pronounced. 
This was also true of towns outside the Montevideo region, where 
the majority of the interior population lived. 

Business Elites 

Uruguay's commercial, financial, and industrial elites were more 
cosmopolitan than the big ranchers. However, the high number 
of basic industries and utilities run by the state meant that large 
private entrepreneurs were less numerous than would otherwise 
be the case. The urban-rural divide was no longer very pronounced: 
traditional landowning families had diversified into food process- 
ing and other businesses, while the sons and daughters of business- 
men were ensured a private education. Until 1984 there was only 
one university in the country, the University of the Republic (also 
known as the University of Montevideo); it served as a major force 
for miscegenation among elites and even among the middle classes. 

Foreign multinational corporations were less active in Uruguay 
than in many other Latin American countries because of the small 
size of its domestic market. One exception to this, however, was 
the banking system, which was heavily taken over by European and 
North American conglomerates in the 1970s and 1980s. A pattern 
of close cooperation between domestic and foreign business interests 
had emerged on the basis of joint ventures and licensing agreements. 

Urban business interests were organized in two rival associa- 
tions: the Chamber of Industry, which was dominated by indus- 
trial manufacturers, and the Chamber of Commerce, which was 
more oriented toward services and retail trades. The Chamber of 
Commerce was enthusiastic about the liberalization of imports and 
the maintenance of a strong currency from 1977 to 1982. By con- 
trast, foreign competition hit industry hard, accustomed as it was 
to the high rates of protection given by the previous model of import- 
substitution industrialization (see Glossary). 

Political Elites 

Uruguay's party leaders were sometimes viewed as forming a 
"political class." Many of the surnames of those active in politics 



71 



Uruguay: A Country Study 

in the 1980s would have been familiar to Uruguayans a century 
earlier. Blanco leaders were more likely than Colorados to have 
attended private secondary schools and to describe themselves as 
practicing Catholics, although this distinction was breaking down. 
With the exception of an apparent increase in the late 1960s, these 
politicians only rarely had business careers, apart from ranchers 
in the National Party. Rather, most made their living as lawyers 
and as public servants. 

The leaders of Uruguay's leftist parties were drawn from a some- 
what wider spectrum of backgrounds than the Colorados and Blan- 
cos. Among the leaders of the former were many white-collar 
workers, especially educators, and a few labor union leaders. 

The power of traditional political bosses, or caudillos, has resided 
in their ability to mobilize voters by means of patronage machines. 
This system of doling out favors, such as public-sector jobs and 
pensions, through local political clubs had, nevertheless, declined 
by 1990. Young voters were more motivated by ideology than their 
parents, which is one reason that the membership of Uruguay's 
leftist parties was growing, whereas that of the traditional National 
and Colorado parties was declining. 

The Middle Class 

Uruguay has often been described as the most middle-class nation 
in Latin America. In this social category were to be found civil 
servants, teachers, white-collar workers, small businessmen, officers 
in the military, and medium-sized farmers. Economic crises since 
the 1960s have, nevertheless, squeezed this sector of the popula- 
tion hard. One reason for the rise of women in the labor force was 
the struggle of middle-class families to maintain their standard of 
living. Moreover, it was very common for middle-class Uruguayans 
to have two (or even more) jobs. 

For much of the twentieth century, Uruguay's middle classes 
benefited from the provision of excellent public education at no 
cost up through university. Public schools began to decline in quality 
in the 1970s, however, and few members of the middle class could 
afford the requisite fees to have their children educated privately. 
A similar pattern of deterioration in public health care and the value 
of state pensions occurred, adding to the difficulties of the middle 
classes. Public-sector wages were severely squeezed under military 
rule (from 1973 to 1985), as were private-sector wages, but to a 
slightly lesser degree. A major factor was the virtual suspension 
of wage bargaining under a climate of systematic repression of labor 
unions. Previously, white-collar unionization had been high (see 
The Labor Movement, ch. 3). 



72 



The Society and Its Environment 



The middle classes were typically employed as civil servants or 
white-collar workers. Many worked in small businesses, but some 
of these businesses were hurt by the market-oriented economic re- 
forms of the 1970s, which led to the liberalization of manufactured 
imports (see Restructuring under the Military Regime, 1973-85, 
ch. 3). From 1978 until 1982, the middle classes benefited from 
a boom in imported durable consumer goods, such as automobiles, 
appliances, and electronics. The subsequent economic slump left 
many families heavily in debt and unable to meet their obligations. 
Particularly hard hit were individuals who had taken out mortgages 
denominated in dollars. When the Uruguayan new peso (for value 
of the Uruguayan new peso — see Glossary) collapsed in 1982, many 
of them found their house and apartment payments had tripled 
overnight. A similar debt crunch hit many medium- sized firms that 
had expanded by borrowing. 

The Uruguayan middle classes were avid joiners of interest 
groups and professional associations. Among these were the pro- 
fessional associations of lawyers, civil servants, notaries, accoun- 
tants, bankers, and physicians. Some white-collar labor unions, 
although less prestigious than the professional associations, were 
home to the middle classes. For instance, workers in health care 
had the Federation of Uruguayan Sanitation Workers, with 13,400 
members. 

High school teachers (profesores) were organized in the National 
Federation of Secondary Teachers, which had nearly 2,400 mem- 
bers. Grade school teachers (maestros) had the Uruguayan Federation 
of Elementary Teachers, with nearly 7,100 members. University 
professors (docentes) belonged to the Association of Professors of the 
University of the Republic, which had 2,000 affiliates. The Uru- 
guayan Association of Bank Employees (Asociacion de Empleados 
Bancarios del Uruguay — AEBU) was much larger, with 15,344 
members, as was the Confederation of State Civil Service Organi- 
zations, with 25,508 members. Many of these associations ran 
cooperative stores and social clubs. For example, the AEBU had 
a large modern headquarters in downtown Montevideo contain- 
ing meeting rooms and a theater. 

The importance of education to the middle classes was under- 
lined by the widespread use of professional titles. Lawyers were 
formally addressed as doctor, accountants as contador, engineers as 
ingeniero, and so forth. However, the rapid expansion of higher edu- 
cation began to lead to graduate unemployment and under- 
employment in the 1960s, a further source of strain on the middle 
classes. 



73 



Uruguay: A Country Study 



Small Farmers and Rural Workers 

Although they accounted for only about 5 percent of Uruguay's 
total land, small farms were common in the littoral and the south. 
Owners of medium-sized farms were able to approximate the liv- 
ing standards of the urban middle class, but for tenant farmers and 
proprietors of smaller areas, life was a constant struggle. Particu- 
larly poor were the small producers of Canelones Department who 
grew vegetables for the capital. 

Because the rural economy was not at all labor intensive, Uru- 
guay had very few rural workers. One exception was the depart- 
ment of Artigas, where large sugarcane plantations had grown up. 
The very low wages of the cane cutters caused them to form a union 
in the 1960s and to bring their protests to the streets of the capital. 
Apart from this, however, Uruguay's few rural workers and small 
farmers had not managed to form organizations to defend their 
economic interests. In particular, the Ruralist movement of the 
1950s and 1960s, which began as a protest by the small farmers 
against government taxes, soon fell under the leadership of large 
landowners. In the late 1980s, a rural workers' union claimed a 
membership of only 4,000 (see The Labor Movement; Land Use 
and Tenure, ch. 3). 

Blue-Collar Workers 

Uruguay lacked a large industrial labor force by the standards 
of the developed world. Indeed, urban employment was dominated 
by the service industries. Only 23 percent of the total labor force 
was employed in industry in 1988. Skilled manual workers neverthe- 
less had tended to form unions quite successfully and hence main- 
tained a relatively comfortable standard of living, at least until the 
military takeover in 1973. Since 1985 they have fought to restore 
the former level of their wages in real terms, but statistics suggest 
that in 1990 these were still lower than in 1980. 

Many workers made only the official minimum wage, which fluc- 
tuated according to inflation, the exchange rate, and government 
policy. In the 1980s, it was under the equivalent of US$100 per 
month. As of June 1990, it stood at US$76, although it must be 
remembered that the cost of living in Uruguay was on the whole 
much lower than in the United States. Overall, the economic po- 
sition of urban blue-collar workers was far superior to, and much 
more stable than, that of workers in the informal sector, which was 
variously defined to include domestic service, street vending (par- 
ticularly of contraband goods from Brazil), home-based piecework, 
sewing, laundering, recycling, begging, and even prostitution and 
crime. 



74 



Plowing in Los Arenales, Canelones Department 
Courtesy Inter-American Development Bank 



75 



Uruguay: A Country Study 

In 1964 Uruguay's labor unions came together to form a single 
federation known as the National Convention of Workers (Con- 
vencion Nacional de Trabajadores — CNT). In 1973 the military 
declared the CNT illegal; labor union activity virtually ceased dur- 
ing the following decade. In 1983, however, a new labor federa- 
tion, known as the Interunion Workers' Assembly (or Plenum) 
(Plenario Intersindical de Trabajadores — PIT), was formed. The 
PIT later changed its name to PIT-CNT to emphasize its histor- 
ical links to the pre- 19 73 labor movement (see Political Forces and 
Interest Groups, ch. 4). 

About 1 5 percent of the economically active population was em- 
ployed as domestic servants, most of them women. In terms of status 
and income, their class position was between that of blue-collar 
workers and the poor. 

The Urban Poor 

The urban poor were concentrated among the unemployed, those 
working in the informal sector of the economy, unskilled laborers, 
and retired persons. Official unemployment figures for Montevideo 
fluctuated from around 8 percent to 15 percent in the 1980s. Esti- 
mates of the proportion of the labor force in the informal sector 
were, by definition, hard to find. But the proportion has certainly 
been rising since the 1960s. At the height of the building boom 
of the late 1970s and early 1980s, about 6 percent of the labor force 
was employed in construction, a highly cyclical (and thus unstable) 
source of jobs. In addition, the real value of state pensions was 
severely eroded in the 1960s and 1970s, leading to widespread mis- 
ery among the elderly. 

Since 1985 the level of unemployment has remained below 10 
percent in Montevideo, and the government has made modest ef- 
forts to restore some of the erosion in the real value of pensions 
(see The Sanguinetti Government, ch. 3). However, the informal 
sector of the economy has continued to grow. 

Income Distribution and Living Standards 

Uruguay's pattern of income distribution remained the most 
egalitarian in Latin America, although it apparentiy worsened under 
military rule from 1973 to 1985. In 1976 the poorest fifth of Uru- 
guayan households received 4.8 percent of total household income, 
the top 10 percent of households took in 30. 1 percent of total house- 
hold income, and the top 20 percent of households took in 46.4 
percent of income. Although unequal, this pattern was closer to 
that of the developed world than to the rest of Latin America. 



76 



The Society and Its Environment 



Despite erosion of the minimum wage, the net impact of the 
recovery of real wages and pensions in the first year after the return 
to democracy in March 1985 appears to have slightly improved 
the distribution of incomes. Both in Montevideo and elsewhere in 
Uruguay, the highest 10 percent of households were reported to 
take in just under 30 percent of household income in 1986, while 
the lowest 20 percent of households garnered just under 6 percent 
of income (see table 5, Appendix). 

During the first half of the twentieth century, living standards 
in Uruguay approximated those of the developed world. Since the 
1950s, however, economic stagnation and even decline have meant 
severe falls in real wages (see table 6, Appendix). This process be- 
came particularly marked starting in 1 968 , the year in which the 
government imposed a wage and price freeze and abolished the 
so-called wage councils, in which government representatives, em- 
ployers, and unions negotiated salaries. (The councils were revived 
in 1985.) 

Real wages grew particularly fast from 1985 to 1987 (see table 7, 
Appendix). However, this was less true in the public sector, where 
in 1989 they remained below their 1980 level. The Colorado govern- 
ment also allowed the real value of the legal minimum wage to con- 
tinue to fall (see table 8, Appendix). 

Although the Colorado government made only cautious attempts 
to redistribute income to the most needy, the revival of economic 
growth helped to produce some improvement in various indica- 
tors of income distribution. The wage share of national income grew 
from 30.3 percent to 31.4 percent between 1985 and 1987, while 
the income share of the self-employed grew from 1 percent to 12.7 
percent. According to the household survey of the General Direc- 
torate of Statistics and Census, the proportion of families below 
the poverty line in Montevideo fell from 27 percent in 1984 to 16 
percent in 1987. 

Reliable data on rural wages were hard to collect. Clearly, they 
were much lower than in interior towns or Montevideo, but offi- 
cial statistics suggested that they did not fall as far or as fast as 
wages in the rest of the economy in the 1970s. 

Family Life 

By the beginning of the twentieth century, the traditional pat- 
tern of patriarchy was breaking down in Uruguay. The relative 
emancipation of women put Uruguay far ahead of the rest of Latin 
America in terms of legal rights and social custom. Civil marriage 
became legally required in 1885, and the influence of the church 
declined. Divorce on the grounds of cruelty by the husband was 



77 



Uruguay: A Country Study 

legalized in 1907, and in 1912 women were given the right to file 
for divorce without a specific cause. Married women were allowed 
to maintain separate bank accounts as early as 1919. Women also 
were provided with equal access to educational opportunities at all 
levels early in the twentieth century, and they began to enter the 
professions in increasing numbers. In 1938 women voted for the 
first time in national elections. Nevertheless, there was a pater- 
nalistic flavor to many of the reforms, which were often seen as 
protecting women rather than guaranteeing their inalienable rights. 

One factor that made it easier for middle-class women to go out 
of the home to work was the widespread availability of domestic 
servants willing to undertake cooking, cleaning, and taking care 
of children for comparatively low wages. By the 1960s, one-quarter 
of all adult women worked. This proportion continued to rise stead- 
ily, reaching over 45 percent in Montevideo by 1985. In 1975 one- 
fifth of all households were headed by women. Nuclear families 
made up 61.2 percent of all households, while there were almost 
as many single-person households (14.6 percent) as traditional ex- 
tended families (17.6 percent). The average number of persons in 
each household was 3.4. 

The small size of Uruguayan families by Latin American stan- 
dards was related to the widespread practice of birth control and 
the middle-class aspiration to provide the best possible education 
for children. Families tended to be larger in rural areas, where the 
birth rate was much higher. In rural areas, however, there was 
an imbalance in the sex ratio because women had a much higher 
propensity to migrate to the towns in search of work, particularly 
as domestic servants. Poor families in rural areas were often un- 
stable; common-law marriage and illegitimacy were widespread. 
Although abortion was illegal, there was no legal distinction be- 
tween children born in and out of wedlock. 

In rural areas, the maintenance of symbolic kinship ties remained 
common. When babies were baptized, they often were given a god- 
father (compadre) chosen from among the members of the local elite. 
This practice, known as compadrazgo, was intended to provide the 
children with useful connections in later life. It formed an impor- 
tant link in the pattern of interaction between rural elites and subor- 
dinate classes. Reciprocal obligations ranged from help from the 
godparent in finding employment to the requirement of loyalty in 
voting on the part of the godchild. 

Relations between husbands and wives in Uruguay were rela- 
tively equal by Latin American standards. The divorce rate had 
grown steadily from 1 per 10,000 population in 1915 to 14 per 1,000 
in 1985. In 1927 the compulsory civil marriage ceremony was 



78 



The Society and Its Environment 



amended so that the bride no longer promised obedience, but both 
man and woman vowed to treat each other with respect. It was 
not uncommon for women to keep their surnames after marriage. 
Often, they simply added the husband's name to theirs. Children 
had their father's surname followed by their mother's. 

Uruguayan children, and especially girls, had a relatively high 
degree of freedom compared with their counterparts in many other 
Latin American countries. Chaperonage was rare. It was expected 
that women would have careers, and by 1970 almost half the total 
school population was female. 

During the 1960s, the phenomenon known as the "generation 
gap" began to be acutely felt in Uruguay. Young people rebelled 
against their parents and adopted permissive life-styles. In many 
cases, they were drawn into radical politics; in fact, in 1990 youth 
was still one of the strongest predictors of left- voting in Uruguay. 

Family ties remained strong in Uruguay despite the rebellious- 
ness of youth. Children frequently lived in the parental home well 
into their thirties, in some cases even after marriage. The usual 
reason for staying at home was economic necessity; many couples 
found affordable housing hard to come by. 

Despite the relative freedom of women, attitudes toward gen- 
der roles and sexuality remained traditionally stereotypical. The 
pattern of machismo was less pronounced than in much of Latin 
America, but males were expected to show "masculine" traits; 
"feminine" characteristics were seen as inferior. At social gather- 
ings, women tended to congregate with other women, and men 
with men. 

Upper-middle-class Uruguayans usually tried to escape Monte- 
video for the beach resorts on weekends and during the long De- 
cember to January summer holidays. Family gatherings typically 
centered on outdoor barbecues (asados), in which large quantities 
of meat were consumed. Another typical custom, symbolic of fam- 
ily and friendship ties, was the sharing of yerba mate, a form of 
green tea. A hollo wed-out gourd (the mate) or sometimes a china 
cup is packed almost full with the green tea. A metal straw (bom- 
billa) is then inserted into the tea, and boiling water is poured on 
top. The mate is then passed around in a circle, each person add- 
ing a little more hot water. This custom was particularly signifi- 
cant under the military regime of 1973 to 1985, when citizens were 
often afraid to congregate in public squares for fear their gossip 
might be seen as political. An innocent mate ceremony could hardly 
arouse suspicions. 

As in other countries, the advent of television has reduced movie 
and theater attendance precipitously, causing more leisure hours 



79 



Uruguay: A Country Study 



to be spent in the home. Uruguayans remained enthusiastic in their 
participation in competitive sports, however. Amateur soccer con- 
tinued to thrive among the middle and lower classes, whereas the 
upper-middle classes preferred tennis, golf, and sailing. For the 
elite, membership in a country club was an important focus of 
leisure activity and a symbol of social status. 

Health and Welfare 

Uruguay has been described as South America's "first welfare 
state" as a result of its pioneering efforts in the fields of public edu- 
cation, health care, and social security. The steady rise in public 
employment, often by the creation of jobs that fulfilled no particu- 
lar function, served to keep the unemployment level down, partic- 
ularly in election years. However, the stagnation of the economy 
starting in the 1950s put increasing strains on this system. In par- 
ticular, declining tax revenues and increased spending produced 
large government deficits and accelerating rates of inflation. For- 
eign advisers began to recommend severe budget cuts as the only 
solution to the chronic fiscal crisis. 

During the first half of the twentieth century, Uruguay, along 
with Argentina, led Latin America in its advanced standards of 
medical care. Even in 1990, the University of the Republic's medical 
school had a high international reputation and continued to attract 
students from other countries in South America. Starting with the 
progressive reforms of the early part of the twentieth century, the 
state has taken a leading role in the provision of health care, par- 
ticularly for the lower classes. Private medicine remained the 
preferred option of the middle and upper classes, however. Under 
military rule from 1973 to 1985, standards of care in public hos- 
pitals and clinics were adversely affected by budget restrictions. 

By the 1970s, Uruguay's welfare state had declined sharply in 
the standards of protection that it afforded to the mass of the popu- 
lation. The government bureaucracy, however, continued to swell. 
Total health care spending in 1984 represented 8.1 percent of GDP, 
a proportion similar to that of the developed world. In the same 
year, about 7.5 percent of household spending went to health care, 
but 400,000 Uruguayans were without state or private health care 
coverage. 

Under the civilian administration inaugurated in 1985, progress 
was made in redirecting the budget away from spending on the 
military and toward social welfare. Defense spending fell from 13.0 
percent of government outlays in 1984 to 11.8 percent in 1986. 
Over the same period, social security decreased from 31.5 percent 
to 27.6 percent, but education grew from 7.4 percent to 10. 1 percent 



80 



Uruguay: A Country Study 

and sanitation from 4.3 percent to 6.7 percent of public expendi- 
ture. 

In 1987 Montevideo had over sixty public health facilities, in- 
cluding seven major public hospitals. About half the interior depart- 
ments had their own hospital; the rest had only a centro auxiliar 
(auxiliary center). Altogether, Uruguay's public health system had 
about 9,505 hospital rooms available. 

In 1985 the number of inhabitants per physician was 466, about 
the same rate as in the developed world. However, the distribu- 
tion of health care services was highly skewed. Outside Montevideo 
the ratio was a much less favorable 1,234 citizens per physician; 
by contrast, there were only 262 inhabitants of Montevideo for every 
doctor. 

Infant Mortality and Life Expectancy 

The infant mortality rate was 48.6 per 1,000 live births in 1975. 
In the first half of the 1980s, it fell to 37.6 per 1,000— low by Latin 
American standards but still almost twice the rate of Chile and Costa 
Rica. In the second half of the decade, however, infant mortality 
began to decline to levels close to those of the latter two countries: 
in 1986 it was 27.7; in 1987, 23.8; in 1988, 20.3; and in 1990, 
22. The increasing share of government spending devoted to in- 
fant health care and nutrition programs appeared to have been one 
reason for this sharp improvement. 

The average life expectancy at birth in 1990 was seventy years 
for men and seventy-six years for women, only slightly behind 
Chile, Costa Rica, and Argentina. The mortality rate remained 
just below 10 per 1,000 population in the 1980s. The leading causes 
of death in 1985 included circulatory disease (40.2 percent), tumors 
(22.6 percent), trauma (4.1 percent), respiratory disorders and in- 
fections (3.8 percent), perinatal complications (2.4 percent), in- 
fectious diseases and parasites (2.4 percent), suicide (1 .0 percent), 
and cirrhosis of the liver (0.9 percent). 

In the late 1980s, Uruguay did not remain exempt from the 
worldwide epidemics of acquired immune deficiency syndrome 
(AIDS) and drug addiction among youth. Although the total num- 
ber of cases of AIDS has not reached the numbers recorded in the 
United States, Europe, or Brazil, AIDS has become a greater con- 
cern. According to the Ministry of Public Health, by the end of 
June 1990 there had been 129 cases of AIDS in Uruguay since 1983, 
when it was first detected. Of those cases, 100 were from Monte- 
video and 29 from the rest of the country. Fifty-nine of the cases 
were contracted inside Uruguay, whereas seventy of the victims 



82 



The Society and Its Environment 



caught the virus outside the country. One hundred and seventeen 
of the cases were men; twelve were women. An additional 627 in- 
dividuals were found to be carrying the virus, without having yet 
shown symptoms of the disease. In the 1983-89 period, sixty-five 
people were known to have died of complications resulting from 
the human immunodeficiency virus (HIV). 

In 1990 Uruguay still enjoyed the image of a "clean" country 
insofar as drugs were concerned. In response to some significant 
negative signs, however, the government formed the National Board 
for the Control of Drug Trafficking and Narcotics Abuse in Janu- 
ary 1988. The board included representatives from the office of 
the president and the ministries of public health, education and 
culture, and interior. It found that drug addiction grew continu- 
ously in Uruguay in 1988. The number of adult drug addicts had 
more than doubled from 321 in 1983 to 697 in 1987; the number 
of children addicted to drugs had quintupled from 62 in 1983 to 
292 in 1987. According to the Ministry of Public Health, the drug 
consumer was predominantly single, with good family relations, 
and the majority had attended secondary school; half of the total 
were employed. The most commonly abused drug was marijuana, 
followed by amphetamines and industrial-use inhalants; cocaine 
and lysergic acid diethylamide (LSD) were also included on the 
list, but to a lesser extent. 

State and Private Health Care 

In 1971 about 82 percent of hospital beds were provided in es- 
tablishments run by the Ministry of Public Health. The same public 
hospitals accounted for 69.5 percent of hospitalizations. About 61 
percent of visits to general practitioners were covered by private 
health plans known as mutuales (mutuals). In the same year, 58.9 
percent of the inhabitants of Montevideo were covered by these 
private associations. About 11.8 percent had the official health card 
of the Ministry of Public Health, entitiing them to free health care. 
A further 6.8 percent had other health plans, usually through their 
place of work. This left 5.8 percent with multiple forms of cover- 
age and 16.6 percent with no coverage at all. 

In 1980 there were 9,089 public hospital beds, about three-fifths 
in the capital and the remainder in the rest of the country. During 
the period of military rule from 1973 to 1985, the government had 
shifted health care spending toward military hospitals, which were, 
however, open only to relatives of the members of the armed forces. 
After 1985 the government made a sustained effort to increase health 
care coverage. From 1985 to 1988, public health cardholders 



83 



Uruguay: A Country Study 

increased from 566,000 to 692,000 in the interior but decreased 
slightly from 323,000 to 310,000 in Montevideo. 

At the end of 1984, there were 918,000 members of private health 
plans in Montevideo and 325,000 in the rest of the country. By 
1988 the numbers had risen to 963,000 and 488,000, respectively. 
Overall, this represented a 17 percent increase in the membership 
of the mutuales from 1984 to 1988. As with the state health provi- 
sion, the greatest increase in coverage occurred in the interior, where 
it was most needed. 

A concurrent effort was made to increase the proportion of in- 
fants receiving inoculations. In 1985 there were 503 cases of whoop- 
ing cough, and in 1986 there were 1,117; but in the first nine months 
of 1988, there were only 21. Over the same period, the number 
of cases of measles first rose from 160 in 1985 to 1,190 in 1987 
but then fell sharply to just 73 in the first nine months of 1988. 
The proportion of infants immunized before age one rose from 61 
to 79 percent in 1985 to 80 to 88 percent in 1987, depending on 
the particular vaccination. 

Government investment in health care equipment rose dra- 
matically after the return to democracy, climbing from US$564,000 
in 1985 to US$2.2 million in 1987. Over the same period, ex- 
penditures on construction of health care facilities rose from 
US$772,000 to US$2.7 million. Total spending by the Ministry 
of Public Health rose 34 percent in real terms, while spending on 
medications doubled. Grandiose plans for new hospitals to be 
financed by foreign development loans were announced in 1989, 
but their realization remained a distant prospect. 

Social Security Pensions 

Uruguay pioneered social security pension programs, starting 
as early as 1896 with a fund for teachers. The plans were subse- 
quently extended piecemeal to different sectors of the labor force 
and soon grew extremely complex and bureaucratic. A system of 
family allowances (based on the number of dependent children) 
was introduced in 1943 and consolidated in 1950. Unfortunately, 
the provision of welfare benefits became politicized as politicians 
from rival parties would intercede on behalf of voters to speed up 
the endless delays. 

Ultimately, the system of benefits began to be abused by poli- 
ticians in order to "buy" votes. The most notorious example was 
the case of the seamstresses: far more pensions were handed out 
to alleged garment workers than there were garment workers. Criti- 
cism of the various programs became vociferous by the 1960s, and 
the programs were reorganized in the single Social Welfare Bank 



84 



Delivering milk in Treinta y Tres 
Courtesy Inter-American Development Bank 

under the 1967 constitution. During the military regime of 1973-85, 
further efforts at rationalization were undertaken, including the 
consolidation of most funds under the General Directorate of Social 
Security (Direction General de Seguridad Social — DGSS). The 
number of claimants continued to rise rapidly, however, reaching 
629,077 in July 1984. 

Social security transfers were not all paid out in the form of pen- 
sions, although in 1983 these accounted for 78.3 percent of total 
oudays. Other categories included family allowances for households 
with young children (6.4 percent in 1983) and benefits for sick- 
ness (4.8 percent) and for unemployment (3.0 percent). However, 
these had suffered similar declines. In 1983 the total outlays of the 
DGSS were financed as follows: employers' contributions, 28.1 per- 
cent; workers' contributions, 28.1 percent; and state contributions, 
43.8 percent. 

Uruguay's population has continued to age since 1963, as the 
censuses of 1963, 1975, and 1985 show. In 1985 the average age 
of the population was 30.3 years. The percentage of the popula- 
tion over age sixty rose from 11.6 in 1963, to 14.3 in 1975, and 
to 15.7 in 1985. Those over age sixty-five accounted for 7.6 per- 
cent, 9.8 percent, and 11.1 percent, respectively, in the same years. 
This long-term aging trend, similar to that of developed countries, 



85 



Uruguay: A Country Study 

worried social planners because of the projected strain on social 
security programs. It was compounded by the high life expectancy 
of Uruguayans after retirement: ten years for men and twenty-one 
years for women. 

The population's aging trend also made the impact of the decline 
in the real value of pensions even more serious because it affected 
an increasingly large share of the population. However, with the 
return to democracy in 1985, efforts were made by the Colorado 
administration of Julio Maria Sanguinetti Cairolo (1985-90) to 
restore some of their real value. Although the opposition parties 
severely criticized the Colorados for not increasing social security 
payments faster, these at least grew 20 percent from 1984 to 1987 
in real terms. The greatest increases were awarded to those receiving 
the smallest pensions. 

Education 

Uruguay had the highest literacy rate in Latin America, at 96 
percent in 1985. There was no appreciable difference in literacy rates 
between males and females, but there were discrepancies between 
urban and rural rates (rural rates being demonstrably lower). Uru- 
guay's system of universal, free, and secular education required a 
total of nine years of compulsory school attendance, from ages six 
to fourteen. The proportion of children of primary school age en- 
rolled in school had long been virtually 100 percent. Furthermore, 
from 1965 to 1985 the proportion of children of secondary school 
age enrolled in some form of secondary school grew from 44 to 70 
percent, also the highest rate in Latin America. The postsecondary 
education enrollment rate was about 20 percent. Coeducation was 
the norm, and females and males attended school in near-equal num- 
bers at all levels. As is typical of any country, however, rates of 
schooling were higher in urban areas than in rural areas. 

The quality of education in Uruguay was rated as high. Teach- 
ing was a socially respected profession and one that paid relatively 
well. Most teachers, trained in teachers' training colleges, were 
deemed well qualified. The main problem confronting the edu- 
cation system was the inadequacy of facilities, instructional mate- 
rials, and teachers' aides. Rural areas often suffered from woefully 
insufficient facilities and supplies. Urban schools often were 
seriously overcrowded and were forced to resort to holding classes 
in multiple shifts. In addition, drop-out and repetition rates, although 
moderate by Latin American standards, were still considered high. 

The Education System 

Primary education in Uruguay was free and compulsory; it en- 
compassed six years of instruction. The number of primary schools 



86 



The Society and Its Environment 



in 1987 was 2,382, including 240 private schools. There were 16,568 
primary school teachers and 354,177 primary school students. This 
resulted in a pupil-teacher ratio of approximately twenty-one to 
one in 1987, compared with about thirty to one in 1970. Boys and 
girls were enrolled in almost equal numbers. 

General education in secondary schools encompassed six years 
of instruction divided into two three-year cycles. The first, or basic, 
cycle was compulsory; the second cycle was geared to university 
preparation. In addition to the academic track, public technical 
education schools provided secondary school education that was 
technical and vocational in nature. The two systems were parallel 
in structure, and there was little provision for transfer between the 
two. All sectors of society traditionally tended to prefer the aca- 
demic course of study, which was regarded as more prestigious. 
As a result, academic secondary education had expanded more 
rapidly than technical education in the second half of the twen- 
tieth century. In 1987 there were 276 general secondary schools 
in Uruguay, including 118 private schools. However, the public 
high schools were much larger, so that in 1987 they actually con- 
tained 145,083 of the country's 175,710 secondary school students 
enrolled in both day classes and night classes. In addition, ninety- 
four technical education schools had a total enrollment of 52,766 
students in 1987. Male and female enrollment at the secondary 
level was roughly equal, but females slighdy outnumbered males 
overall (constituting, for example, 53 percent of the secondary school 
student body in 1982). It appeared that females were in the majority 
in the basic cycle but were very slightly outnumbered by males in 
the university preparatory cycle. 

Uruguay had only one public university, the University of the 
Republic (also known as the University of Montevideo), founded 
in 1849, and only one private university, the Catholic University 
of Uruguay, established in 1984 and also in Montevideo. Educa- 
tion at the University of the Republic was free and, in general, 
open to all those possessing a bachillerato, or certificate awarded for 
completion of both cycles of general secondary education. Despite 
the free tuition, however, access to a university education tended 
to be limited to children of middle- and upper-income families be- 
cause the need to supplement the family income by working, cou- 
pled with the expense of books and other fees, placed a university 
education out of the reach of many. Moreover, the fact that the 
only public university was in Montevideo severely limited the ability 
of those in the interior to attend university unless their families 
were relatively well off financially. In 1988 about 69 percent of 
university students were from Montevideo. 



87 



Uruguay: A Country Study 

The number of university students continued to grow rapidly, 
from nearly 22,000 in 1970 to over 61,000 in 1988. Of that total, 
women accounted for about 58 percent. Most courses of study were 
intended to last from four to six years, but the average time spent 
at university by a successful student was usually considerably longer. 
As in the rest of Latin America, maintaining the status of student 
had various advantages, such as reduced fares on buses and subsi- 
dized canteens. This was one reason that the student population 
was so large yet the number of graduates relatively low. In 1986 
only 3,654 students (2,188 women and 1,455 men) graduated from 
university, whereas 16,878 entered that year. Uruguayans exhibited 
a strong preference for the disciplines and professions they deemed 
prestigious, such as law, social science, engineering, medicine, eco- 
nomics, and administration. 

Observers continued to note the discrepancy between univer- 
sity training and job opportunities, particularly in the prestigious 
fields. This gap contributed to the substantial level of emigration 
of the best-educated young Uruguayan professionals (see Emigra- 
tion, this ch.). 

Historical Origins and Evolution of Education 

Uruguay pioneered universal, free, and compulsory primary edu- 
cation in the Americas under the influence of Jose Pedro Varela 
(president, 1875-76), whose writings convinced the government 
to pass the 1877 Law of Common Education. The model adopted 
for public schools was taken from the French system, and a cen- 
tralized, nationwide system was established. A rigid separation into 
three branches of education grew up — primary, secondary, and 
university. Teacher training for grade school teachers was connected 
to the primary school system. The National Institute of Technical 
Education (Instituto Nacional de Educacion Tecnica — INET) grew 
up as an extension of the secondary school system. By the late 1950s, 
all three branches of the education system had established adminis- 
trative autonomy, including complete control over their budgets. 
The Organic University Law of 1958 provided that the governing 
bodies of the University of the Republic would be elected by the 
members of the faculty, alumni, and students. 

By the late 1960s, Uruguayan secondary schools and the vari- 
ous faculties of the University of the Republic had become extremely 
politicized. Student sit-ins, demonstrations, and even riots were 
commonplace. Classes and examinations were frequently disrupted. 
After 1973 the authorities vowed to put an end to this situation, 
and political purges in the education system became widespread. 
Some teachers were able to find work in private schools, but others 



88 



The Society and Its Environment 



either left the profession or emigrated. Entire branches of the univer- 
sity, such as the Institute of Social Sciences, were closed for a time. 
Academic standards suffered across the board as some of the best 
teachers and professors were fired and replaced by people with only 
mediocre qualifications. 

Educational Reforms under Military Rule, 1973-85 

In 1973, the year in which Uruguay descended into authoritarian 
rule, major changes were decreed in the education system. The 
National Council for Education (Consejo Nacional de Education — 
Conae) was set up to oversee all three branches of education under 
the supervision of the executive branch of government. At the same 
time, the compulsory length of schooling was raised from six to 
nine years. The secondary curriculum was completely reorganized, 
as was the pattern of teacher training. Finally, the INET saw its 
status and budget upgraded. However, overall spending on edu- 
cation fell from 12.2 percent of the central government budget in 
1974 to 7.3 percent in 1982. 

Enrollments in primary education (both state and private) fell 
6 percent from 1968 to 1981. From 1968 to 1982, secondary school 
enrollments grew 6 percent; however, about half the secondary 
school students in Montevideo (and 70 percent in the interior) 
dropped out before receiving any certification. Over the same pe- 
riod, there was a boom in technical schools; enrollments increased 
66 percent in the interior and 27 percent in Montevideo. The major 
cause of this increase was the new ciclo bdsico (basic cycle), which 
added three years of compulsory secondary education to the six 
years of compulsory primary schooling. However, the drop-out rate 
remained about 50 percent. Enrollments in the University of the 
Republic doubled from 1968 to 1982, but the proportion of stu- 
dents graduating fell to just 8 percent. 

In 1984, as something of a parting shot, Uruguay's military 
government formally granted university status to a Catholic col- 
lege that had been expanding over the previous decade. This ended 
the University of the Republic's monopoly, which had lasted since 
its foundation in 1849. The new Catholic University of Uruguay 
remained extremely small, however, compared with its rival. 

Education under the Colorados, 1985-88 

Shortly after entering office in March 1985, Sanguinetti passed 
a decree aimed at restoring greater autonomy to the education sys- 
tem. Conae was replaced by the National Administration of Pub- 
lic Education, which oversaw three decentralized councils — one for 
primary, one for secondary, and one for technical education. Full 



89 



Uruguay: A Country Study 



autonomy was restored to the University of the Republic. Whereas 
total spending on education represented 7.4 percent of the national 
budget in 1984, by 1987 this had risen to 10.9 percent, equivalent 
to US$175 million. 

From 1985 to 1988, the government agreed to rehire all teachers 
and professors who had lost their jobs during the political purges 
after 1973 (3,241 accepted the offer of returning to their old jobs, 
but 1,520 took retirement instead). In many cases, the rehiring 
of former teachers led to unnecessary numbers of staff, as the 
government undertook not to fire any of the replacement teachers 
that had been taken on under the military, although in some cases 
they lacked qualifications. 

Clashes between the education authorities and the government 
were common after 1985, given the existence of a relatively con- 
servative government and far more liberal teachers. Nevertheless, 
an element of balance between centralized control and decentral- 
ized initiative was successfully restored. Relations between the 
government and the University of the Republic were surprisingly 
smooth, and the latter' s share of the national budget grew from 
2.5 percent in 1984 to 4.3 percent (US$59 million) in 1988. 

During the period of military rule, another phenomenon began 
to emerge — the establishment of private research institutes. These 
relied entirely on funds from foreign development foundations, such 
as the Inter- American Foundation (a United States agency), the 
International Development Agency (a Canadian agency), and vari- 
ous West European equivalents (see Political Forces and Interest 
Groups, ch. 4). The new institutes were comparatively small, usu- 
ally only hiring a dozen or so full-time staff, but they constituted 
an important haven for academics who had lost their jobs for po- 
litical reasons. Without these private centers, even more academics 
would have been forced into exile. 

Among the new private research centers was the Latin Ameri- 
can Center of Human Economy (Centro Latinoamericano de 
Economia Humana — CLAEH). By far the largest of the centers, 
the CLAEH was closely linked to the Christian Democrats. Apart 
from carrying out a broad range of sociological and economic 
research, it also conducted courses for university-level students and 
published what was for a time Uruguay's only social science jour- 
nal. Somewhat more to the left was the Economic Research Center 
(Centro de Investigaciones Economicas — CINVE), which special- 
ized in research on the economy, particularly that of the rural sec- 
tor and the impact of the economic liberalization pursued under 
the military. Two other institutes with a more sociological agenda 
of research were the Center of Information and Studies of Uruguay 



90 



The Society and Its Environment 



(Centro de Informaciones y Estudios del Uruguay — CIESU) and 
the Interdisciplinary Center of Development Studies, Uruguay 
(Centro Interdisciplinario de Estudios del Desarrollo, Uruguay — 
CIEDUR). 

With the return to democracy in 1985, many of these centers 
found it hard to continue to win foreign grants to undertake their 
research, and most of their personnel attempted to return to their 
former jobs in higher education. Where possible, however, the 
teachers tried to retain both positions. 

Religion 

Roman Catholicism was the dominant religion in Uruguay, but 
Uruguay had long been a secular society. In 1981 the nation was 
divided into 221 parishes and had 204 diocesan priests. In addi- 
tion, there were 374 monks and 1,580 nuns. About three-quarters 
of all babies were baptized in the church. In the 1963 census, 62 
percent of Uruguayans had declared themselves Catholics. 
However, according to data compiled by the Uruguayan Bishops 
Conference in 1978, only 105,248 citizens regularly attended mass. 
This figure represented less than 4 percent of the population. At- 
tendance at mass was, however, slightly higher in the interior of 
the country and substantially higher among women. There was 
also evidence that religious observance was higher among the upper 
classes than among the middle and lower strata of society. In the 
late 1980s, an estimated 66 percent of Uruguayans were professed 
Roman Catholics, but less than half of the adult population attended 
church regularly. 

Uruguay's secularization began with the relatively minor role 
of the church in the colonial era, compared with other parts of the 
Spanish Empire. The small numbers of Uruguay's Indians, and 
their fierce resistance to proselytization, reduced the influence of 
the ecclesiastical authorities. After independence, anticlerical ideas 
spread to Uruguay, particularly from France, further eroding the 
influence of the church. In 1837 civil marriage was recognized, 
and in 1861 the state took over public cemeteries. In 1907 divorce 
was legalized, and in 1909 all religious instruction was banned from 
state schools. Under the influence of the radical Colorado reformer 
Jose Batlle y Ordonez (1903-07, 1911-15), complete separation 
of church and state was introduced with the new constitution of 
1917. Batlle y Ordonez went as far as to have religious holidays 
legally renamed. Even as of 1990, Uruguayans referred to Holy 
Week as "Tourism Week." 

Nevertheless, the separation of church and state ended religious 
conflict in Uruguay, and since that time Catholic schools have been 



91 



Uruguay: A Country Study 

allowed to flourish. A Catholic party, the Civic Union of Uruguay 
(Union Civica del Uruguay — UCU), was founded in 1912 but 
never won more than a low percentage of the national vote. By 
the 1960s, the progressive trend in the worldwide church was strong- 
ly felt in Uruguay under the influence of Pope John XXIII and 
Pope Paul VI. Particularly influential was the 1968 Latin Ameri- 
can Bishops Conference in Medellin, Colombia, at which the con- 
cept of " structural sin" was put forward. By this doctrine, evil was 
seen as existing not only in the actions of individuals but also in 
the unequal organization of entire societies. The second Latin 
American Bishops Conference, held in Mexico in 1979, also had 
an important dynamizing and radicalizing impact in Uruguay. This 
time, the bishops called for a "preferential option for the poor." 
Sections of the Uruguayan church in fact became quite radical: 
when members of the National Liberation Movement-Tupamaros 
(Movimiento de Liberation Nacional-Tupamaros — MLN-T) were 
given amnesty in 1985, for a time they were housed in a Monte- 
video monastery while they readjusted to normal life. 

One symptom of the growing progressive trend in the Uruguayan 
Catholic movement was the decision of the UCU to adopt the name 
Christian Democratic Party (Partido Democrata Cristiano — PDC) 
in 1962. The new-found social conscience was strongly influenced 
by French Catholic philosophers — first Jacques Maritain and later 
Father Lebret. During the 1960s, the PDC moved further and fur- 
ther left, eventually espousing a form of "communitarian social- 
ism" under its brilliant young leader, Juan Pablo Terra. In 1971 
the PDC allied with the Communist Party of Uruguay and the So- 
cialist Party of Uruguay to form the so-called Broad Front alliance. 
That caused conservative Catholics to form the Civic Union (Union 
Civica — UC) to offer religious voters a nonradical alternative, but 
the UC scarcely achieved any influence (see Political Parties, ch. 4). 

During the twentieth century, Protestant sects began to grow in 
importance. Estimates put the Protestant proportion of the popula- 
tion at 2 percent or a little higher in the late 1980s. From 1960 to 
1985, the number of Protestants is estimated to have increased by 
60 percent. Over the same period, the number of Protestants grew 
500 percent or more in many Latin American countries. Uruguay 
was thus considered a "disappointment" by evangelical crusaders. 

Jews constituted a small proportion of the population (about 2 
percent), with most living in Montevideo. The size of the Jewish 
community had dwindled since 1970, primarily because of 
emigration. 

* * * 



92 



The Society and Its Environment 



Very little has been published in English on Uruguayan society 
in recent years. Simon Gabriel Hanson's Utopia in Uruguay, pub- 
lished in 1938, provides a detailed history of social and economic 
reforms in the first three decades of the twentieth century. Russell 
H. Fitzgibbon's Uruguay: Portrait of a Democracy paints a rosy pic- 
ture of Uruguay in the golden years of prosperity and social peace 
prior to the mid-1950s. George Pendle's Uruguay: South America's 
First Welfare State examines this period more concisely. English- 
language works discussing the crisis of Uruguay's welfare state in 
the 1960s include Marvin Alisky's Uruguay: A Contemporary Survey 
and M.H.J. Finch's more detailed and scholarly A Political Econ- 
omy of Uruguay since 1870. Martin Weinstein's 1975 book on the 
rise of authoritarianism, Uruguay: The Politics of Failure, and his more 
recent volume on the return to democracy, Uruguay: Democracy at 
the Crossroads, provide ample information on the social situation. 

Many of the most useful recent sources are journal articles or 
chapters in edited volumes. Arturo C. Porzecanski contributed a 
chapter on the problems of the Uruguayan welfare state to Carmelo 
Mesa-Lago's Social Security in Latin America. Lauren Benton discusses 
the evolution of housing and planning in Montevideo under mili- 
tary rule in "Reshaping the Urban Core." Alejandro Portes, Silvia 
Blitzer, and John Curtis examine the growth of the informal econ- 
omy in Montevideo households in "The Urban Informal Sector 
in Uruguay." Graciela Taglioretti traces the increasing participa- 
tion rate of women in the labor force in Women and Work in Uru- 
guay. Among many important works, distinguished Uruguayan 
sociologist Aldo Solari and young colleague Rolando Franco have 
published an article on higher education, "Equality of Opportu- 
nities and Elitism in the Uruguayan University." The same authors 
contributed a chapter on "The Family in Uruguay" to Man Singh 
Das and Clinton J. Jesser's The Family in Latin America. 

An extremely valuable source is Finch's Uruguay. Statistical data 
are available in various editions of the Uruguayan government pub- 
lication Anuario estadistico. (For further information and complete 
citations, see Bibliography.) 



93 



Chapter 3. The Economy 



Montevideo's harbor 



URUGUAY IS A WEALTHY COUNTRY by Latin American 
standards, although its economic development has been sluggish 
since the 1950s. In 1990 the country had a gross domestic product 
(GDP — see Glossary) of approximately US$9.2 billion, or 
US$2,970 per capita, placing it among the highest-income coun- 
tries in Latin America. Uruguay's small population (just over 3 
million) and low population growth (0 . 7 percent per year) enabled 
its people to maintain a reasonable standard of living during the 
1980s, despite the nation's unsteady economic performance. Like 
many other countries in the region, Uruguay faced a large exter- 
nal debt and an appreciable public- sector deficit, both of which 
impeded the growth of the economy. Other major limitations on 
growth were the continued dependence on a few agricultural 
products and one of South America's lowest levels of foreign and 
domestic investment. 

Uruguay's economy developed rapidly during the first three de- 
cades of the twentieth century because of expanding beef and wool 
exportation. Rising trade income led to the creation of an advanced 
welfare state in which the government redistributed wealth and pro- 
tected workers. After agricultural exports leveled off in the 1950s, 
the government's role in the economy expanded. With agriculture 
stalled and manufacturing potential limited by the small size of the 
domestic market, the public sector became the source of most new 
jobs in Uruguay. The economy operated behind high tariff barri- 
ers, barring competition from abroad. An alliance between the na- 
tion's two major political parties upheld this statist model through 
the 1960s, but lack of GDP growth and large public-sector deficits 
testified to its inefficiency. 

Although the military government (1973-85) enacted major eco- 
nomic reforms during the 1970s, it operated with high fiscal deficits 
and borrowed extensively to pay for those deficits. In an effort to 
reorient the stagnated economy toward external markets, the 
government eliminated price controls and slashed tariffs while 
providing subsidies to exporters. These reforms of the goods mar- 
ket produced favorable results in the short run: exports, invest- 
ment, and GDP all increased significantly. When the government 
went further, however, by deregulating the banking sector in hopes 
of removing inflationary pressures, the economy became unsta- 
ble. In 1981 Uruguay's economy went into recession. 



97 



Uruguay: A Country Study 

One source of instability was the growing "dollarization" of the 
banks. When foreign-exchange regulations were canceled, Unit- 
ed States dollars (mostly from Argentine real estate investment) 
flowed into Uruguay. Uruguayan banks, in turn, loaned dollars 
to private companies and ranchers within the country. The danger 
in this system was the exchange rate: when the government allowed 
its currency, the Uruguayan new peso (for value of the Uruguayan 
new peso — see Glossary), to float against the dollar in 1982, the peso 
value of many Uruguayan loans suddenly tripled. Thus, Uruguay 
faced both a recession and a domestic debt crisis in the early 1980s. 

In 1986-87 the economy recovered from the recession as real 
GDP increased by 6.6 percent in 1986 and 4.9 percent in 1987. 
The renewed emphasis on exports, including several new categories 
of goods, resulted in a positive trade balance. Real wages, which 
had fallen by 50 percent in the 1970s but risen by 15 percent in 
the early 1980s, increased again (but only marginally), as did em- 
ployment (by 4 percent). These modest improvements could not 
mask fundamental problems, however. Inflation averaged over 60 
percent per year in the 1980s, despite efforts to reduce it. In addi- 
tion, the domestic debt was largely absorbed by the public sector, 
but in the process Uruguay's deficit and foreign debt became larger. 
Debt service alone absorbed about one-quarter of export earnings. 
During the last two years of the administration of Julio Maria San- 
guinetti Cairolo (1985-90), fiscal pressures forced the government 
to abandon its growth-promotion strategy, and GDP did not in- 
crease. On the contrary, real GDP growth fell to 0.5 percent in 
1988, 1.5 percent in 1989, and an estimated - 0.4 percent in 1990. 

In 1989 Sanguinetti defended his administration's economic 
record in terms of what had not happened. In a speech to the General 
Assembly, he said that Uruguay's political and economic climate 
remained stable in contrast to its larger neighbors (Argentina and 
Brazil). The nation's economy "had not collapsed into regional 
hyperinflation, as was predicted; nor had the banking crisis that 
the government inherited destroyed the financial system; nor had 
the heavy external debt prevented the country from growing. ' ' The 
statement was an apt summary of both the government's cautious 
philosophy and of Uruguay's limited economic progress in the late 
1980s. 

The Sanguinetti government could claim credit for steering a 
sensible course during a difficult decade for Latin American na- 
tions. The government did not, however, make much progress ad- 
dressing a fundamental limitation on the economy and the leading 
cause of the deficit: the size of the public sector. Powerful public- 
sector unions made it difficult for the government to reduce public 



98 



The Economy 



employment. When, for example, the inefficient passenger rail 
service was discontinued in 1988 because of declining ridership, 
workers were not released but rather were transferred to other 
government jobs. The welfare-state model remained largely intact. 
By the last two years of the decade, however, economists and poli- 
ticians were beginning to ask basic questions about the state's proper 
role in the economy. 

An even more fundamental question, not addressed in the 1980s, 
was the economy's heavy dependence on a few livestock products, 
which were produced by primitive agricultural practices. Although 
exports could be diversified, for example, by producing not just 
wool but also woolen textiles and apparel, the supply of raw material 
depended on methods of raising sheep and cattle that had not 
changed significantiy in two centuries. Livestock ranged over unim- 
proved pastures whose carrying capacity was quite limited; produc- 
tion had actually decreased since the beginning of the twentieth 
century. The vulnerability of the sector was demonstrated in the 
late 1980s when a two-year drought (1988-89) decimated livestock 
herds. 

Such fundamental issues were still in the background as Luis 
Alberto Lacalle de Herrera became president in March 1990. 
Lacalle indicated that his government would continue the cautious 
adjustment policies of its predecessor, seeking to reduce inflation 
and debt first and to resume growth second. Lacalle embraced 
privatization and drew up a bill to eliminate several state monop- 
olies. Continued diversification of exports, including the possibil- 
ity of exporting services, also appeared to hold good prospects for 
economic growth. 

Growth and Structure of the Economy 

Uruguay's recent economic history can be divided into two stark- 
ly contrasting periods. During the first, from the late 1800s until 
the 1950s, Uruguay achieved remarkable growth and a high stan- 
dard of living. Expanding livestock exports — principally beef, mut- 
ton, and wool — accounted for this economic growth. Advanced 
social welfare programs, which redistributed wealth from the 
livestock sector to the rest of the economy, raised the standard of 
living for a majority of the population and contributed to social 
harmony. Booming livestock exports funded social programs and 
a state-led effort to build up new industries in Uruguay, such as 
domestic consumables (mainly food and beverages) and textiles. 
Thus, although Uruguay's economy was almost completely depen- 
dent on meat and wool exports, the strong earnings from those 
products helped to diversify the economy. As long as its exports 



99 



Uruguay: A Country Study 

continued to expand and world prices for those exports remained 
high, Uruguay's economic growth was ensured. 

When export earnings faltered in the 1950s, however, the fabric 
of Uruguay's economy began to unravel. The country entered a 
decades-long period of economic stagnation. Export earnings first 
declined when world demand fell during the Great Depression of 
the 1930s. Prices later recovered somewhat, but a more important 
limitation on Uruguay's export earnings arose: livestock produc- 
tion reached its limits. Without room for continued expansion of 
traditional exports, and without a well-developed industrial sec- 
tor, it became increasingly difficult for Uruguay to uphold the so- 
cial welfare model that it had adopted in more prosperous times. 
The memory of those times, when livestock products earned enough 
to make Uruguay the "Switzerland of South America, " made Uru- 
guayans reluctant to completely reshape their economy. To un- 
derstand that reluctance and its consequences, it is necessary to 
examine Uruguay's economic history in more detail. 

Colonial Period 

The foundation for Uruguay's livestock-based economy was laid 
well before the nation achieved independence. In 1603 Spanish 
colonists released cattle and horses on the empty plains of what 
is now Uruguay, then known as the Banda Oriental (eastern side, 
or bank, of the Rio Uruguay). The livestock thrived in Uruguay's 
temperate climate, grazing on the natural pastures that still cover 
most of the countryside. By the early 1700s, there were millions 
of cattle in the area. During the "leather age," which lasted for 
the next century and a half, Uruguay's abundant livestock attracted 
traders and settlers from the nearby Argentine provinces. Hides 
became the area's chief export. Cattie raising, which seems to have 
begun almost by chance, quickly took hold of Uruguay's rural 
economy. 

The success of simple livestock-ranching techniques in Uruguay 
during the colonial period was to have long-term consequences. 
Uruguay's temperate climate, natural pastures, and abundant land 
(because of its small population during the colonial period) com- 
bined to favor extensive methods of raising cattle. For ranchers, 
these methods held two economic advantages. Both investment and 
labor costs were kept to a minimum because cattle ranged free, 
subsisted on natural grass cover, and required little care. Well af- 
ter independence in 1828, even when Uruguay had become an im- 
portant exporter of livestock products, these advantages continued 
to exert a great deal of influence on the rural sector. Despite the 
limitations of extensive livestock raising, including low production 



100 



The Economy 



levels per hectare and slow growth of stock, few ranchers ever be- 
came convinced that more intensive production techniques were 
worth the cost. As a result, the fundamental method of livestock 
production in Uruguay changed very little in over two centuries. 

Postindependence Era 

During the decades immediately following independence, 
however, political instability, not livestock production techniques, 
limited the development of Uruguay's rural economy. Until the 
mid- 1800s, rival factions vied for control of the countryside, ob- 
structing commerce and confiscating or destroying cattle and other 
property. Foreign investment, which was to play an important role 
in building up Uruguay's infrastructure, was delayed. And although 
the rural population was small to begin with, many settlers left the 
countryside in search of more peaceful surroundings. Those who 
remained operated cattle ranches (estancias) or practiced subsistence 
agriculture. 

Rural struggles for political control thus slowed the growth of 
the livestock sector. By contrast, Montevideo, Uruguay's capital, 
where political struggles were less strident because of the city's 
booming trade and bustiing social and cultural life, rapidly became 
a hub of economic activity. Montevideo was not founded until 1726, 
but its superb port allowed it to gain an increasing role in regional 
and international trade. In the 1800s, the Uruguayan capital be- 
came an important transshipment point because European import- 
ers and exporters preferred its port to that of nearby Buenos Aires 
(until the latter was improved in the 1870s). However, the volume 
of foreign traded goods passing through Montevideo had only a 
minimal impact on rural Uruguay. As a result, the city's develop- 
ment outpaced and diverged from that of the countryside. The 
different economic interests in the two areas helped drive a wedge 
between rural elites, who had amassed large landholdings and 
resented foreign involvement in the economy, and urban business- 
men, who adopted outward-oriented attitudes and profited from 
trade. Later, profits from exports would become important to rural 
livestock producers as well, but the contrast between urban and 
rural economic (and political) orientations would persist. 

The Export Model 

After several decades of arrested development, Uruguay's econ- 
omy underwent a series of important changes during the latter half 
of the 1800s. The consolidation of political control by the Colora- 
do Party (Partido Colorado) and the division of the control of the 
departments in 1872 spelled the end of almost constant warfare 



101 



Uruguay: A Country Study 

and meant that the departments of Uruguay were finally united 
as one nation. Internal barriers to trade were removed, and the 
issuance of a national currency (the peso) in 1862 favored com- 
mercial activity. Political stability also allowed increased foreign 
involvement in the economy and encouraged technological ad- 
vances. The framework for Uruguay's primary-product export 
economy, which supplied food and basic inputs to Europe's dy- 
namic industrial sector, was erected during this period. 

Livestock production changed in several ways as Uruguay ad- 
justed to the export model. First, meat-packing technology was in- 
troduced in the mid- 1860s, allowing canning of meat for export. 
Until then, beef was preserved only in a dry, salted form (tasajo), 
which appealed to a narrow export market (principally Brazil and 
Cuba, where it was fed to slave laborers). Second, livestock produc- 
tion was diversified when sheep ranching expanded rapidly, reflect- 
ing the British textile industry's demand for imported wool. After 
1870 Uruguay had more sheep than cattle, largely because of an 
influx of sheep ranchers from France and Britain. A third change 
in the livestock sector came about in the 1870s with the introduc- 
tion of barbed wire. For the first time, the boundaries of large es- 
tancias were marked off precisely, decreasing the number of ranch 
hands needed to watch over herds and driving many subsistence 
farmers off lands on the margins of large estates. Finally, the con- 
struction of railroad lines and telegraph networks provided the in- 
frastructure that linked rural Uruguay to the thriving port of 
Montevideo. 

These changes in the structure of the economy paved the way 
for a substantial increase in export earnings while reinforcing the 
importance of livestock production. In 1876 Uruguay had a posi- 
tive balance of trade for the first time, and its export volume more 
than doubled over the next decade. Exports of wool increased dra- 
matically, matching the value of leather exports by 1884. Residents 
of Montevideo were said to gauge the country's prosperity by count- 
ing the stacks of cowhides and bales of wool waiting to be loaded 
aboard ships. After 1900 the ability to ship frozen meat to Europe 
and the United States transformed the beef industry, added to Uru- 
guayan export earnings as world demand for beef grew, and raised 
the importance of cattle production. 

The nation's rising prosperity at the turn of the twentieth cen- 
tury rested firmly on rural livestock production. Paradoxically, 
however, it was in Montevideo that the most dramatic demographic 
and economic effects of growth were felt. The city's population in- 
creased, mainly because several waves of immigrants arrived from 
Europe. Most of these immigrants came from urban areas of Italy 



102 



Bags of wool ready for export in Montevideo 
Courtesy Charles Guy Gillespie 

and Spain, so it was natural that they tended to settie in Uruguay's 
urban center, where jobs were available. At the same time, the 
city's population was increasing because of the arrival of displaced 
laborers from the Uruguayan countryside. Both natives and im- 
migrants made up a growing pool of labor for Montevideo's small 
but dynamic industries, many of which were owned by foreign- 
ers. Using mostly artisanal techniques, the city's workshops be- 
gan to supply the home market with a variety of goods, such as 
footwear, clothing, wine, tobacco, paper, furniture, and construc- 
tion materials. 

Batllism 

The government's protectionist policies — in the form of tariffs on 
imported manufactured goods, first imposed during the late 1800s — 
encouraged these light industries. However, it was Uruguay's most 
significant political figure, Jose Batlle y Ordonez (1903-07, 1911 — 
15), who devised an overarching government strategy that took 
into account the growing urban population and set the tone for 
the nation's economic development for much of the 1900s. 

Two aspects of Batlle y Ordonez's sophisticated political program 
were most relevant for the long-term development of the economy. 
First, the social components of Batllism raised the standing of the 



103 



Uruguay: A Country Study 



average laborer. The government enacted legislation that was un- 
precedented in Latin America: a minimum wage, a day of rest af- 
ter six workdays, workmen's compensation, and old-age pensions. 
Second, and more significant over the long term, however, were 
Batlle y Ordonez's efforts to give the state a multifaceted role in 
the economy. The state was to regulate the economy, perform key 
activities, protect laborers from unfair working conditions, and 
minimize the influence that foreign-owned companies would have 
in Uruguay (see Batlle y Ordonez and the Modern State, ch. 1). 

Under Batlle y Ordonez's leadership, the state created or na- 
tionalized a wide range of service enterprises, officially known as 
autonomous entities (autonomous agencies or state enterprises; see 
Glossary), including an insurance company, public utilities, and 
mortgage banks. Later, the government became deeply involved 
in the production of goods, operating over twenty state enterprises, 
including the giant National Administration of Fuels, Alcohol, and 
Portland Cement (Administration Nacional de Combustibles, Al- 
cohol, y Portland — ANCAP). By 1931 these state enterprises em- 
ployed 9 percent of the nation's work force, including 16 percent 
of the workers in Montevideo. 

Uruguay's novel economic policies bore fruit. Incomes rose on 
the strength of impressive export earnings. The value of exports 
doubled between 1900 and the onset of World War I, when beef 
exports, for example, reached 130,000 tons per year. Between 1926 
and 1930, beef shipments continued to increase at a rapid rate, 
averaging 206,000 tons per year, a record that has not been equaled 
since then. During the same period, the Batlle y Ordonez initia- 
tives improved the lot of the worker, helped create a large middle 
class, and added to the productive capacity of the economy. The 
fact that all three developments — increased export earnings, im- 
proved conditions for labor, and successful state enterprises — 
occurred simultaneously helped Uruguayans to associate state in- 
tervention with prosperity. 

The success of the export model, because of rising world demand 
and prices, was seen as the success of Batllism. However, as many 
observers have pointed out, the restructuring of the economy that 
occurred under Batlle y Ordonez and his successors did not ex- 
tend to the roots of that economy, the livestock sector. Because his 
political base did not reach beyond Montevideo into the country- 
side, and because he believed that market forces and property tax- 
es would lead livestock producers to become more efficient, Batlle 
y Ordonez essentially left the rural sector to its own devices. In 
doing so, he limited the extent to which his own bold reforms could 
transform the economy. 



104 



The Economy 



Stagnation 

The precarious nature of Uruguay's primary-product export 
economy, so successful during the early decades of the 1900s, was 
gradually made clear for two distinct reasons. First, the sharp con- 
traction of world demand for Uruguay's exports during the Great 
Depression showed the hazards of being at the mercy of external 
markets and foreign prices. Uruguay's export earnings fell by 40 
percent between 1930 and 1932 as world demand contracted and 
importing nations adopted protectionist measures. Such a drastic 
decrease in earnings was only temporary, however. During World 
War II, prices recovered, making the export model appear viable 
again, if vulnerable. Still later, Uruguayan exporters were occa- 
sionally able to gain handsomely from world price increases. The 
most dramatic example of this phenomenon occurred during the 
Korean War (1950-53). Wool prices tripled temporarily as demand 
for cold- weather uniforms surged. 

The volatility of export prices, which was itself troubling, also 
delayed recognition of the second, underlying limitation on Uru- 
guay's export-based economy: the limited supply of livestock 
products. Production of beef stagnated by the mid- 1930s, wool by 
the mid-1950s. With only minor modifications, ranchers continued 
to rely on the extensive production techniques used since the colonial 
period. Livestock production was therefore limited by the carry- 
ing capacity of the land. For many years, successful livestock 
producers had been able to expand their operations by simply pur- 
chasing or renting additional land, but after the tremendous ex- 
pansion of both cattie ranching and sheep ranching during the early 
decades of the 1900s, this option was no longer available. Producers 
rejected the obvious alternative of increasing production levels by 
using more intensive techniques, such as fertilized pastures. Ac- 
cording to a study published by the Economy Institute (Instituto 
de Economfa) at the University of the Republic (also known as the 
University of Montevideo) in 1969, ranchers chose not to invest 
their profits in improved pastures because many more lucrative 
investments were available. Preferred investments included manu- 
facturing (after World War II), urban real estate (during the 1950s), 
and overseas opportunities (leading to substantial capital flight dur- 
ing the 1960s). 

The stagnation of livestock production undercut the export model 
that had brought Uruguay its prosperity. At first the nation was 
able to avoid complete economic paralysis by turning from livestock 
production to industrial development, from the dormant country- 
side to the dynamic city of Montevideo. Like most other Latin 



105 



Uruguay: A Country Study 

American nations, Uruguay responded to the Great Depression 
by implementing a policy intended to encourage diversification away 
from primary products, reduce imports, and increase employment. 

The so-called import-substitution industrialization (see Glossary) 
strategy raised tariff barriers to discourage imports and protect new 
manufacturing enterprises. In addition to increased protectionism, 
several other conditions in Uruguay favored the industrialization 
that accelerated beginning in the mid- 1930s. Labor was plentiful 
in Montevideo; 100,000 immigrants had arrived from Europe dur- 
ing the 1920s. Equitable income distribution also meant that there 
was a sizable middle-class market for manufactured products. Fi- 
nally, wealthy livestock producers were ready to invest in new en- 
terprises. 

Industry developed rapidly under these conditions. The num- 
ber of firms, most of them employing ten or fewer workers, tri- 
pled from 7,000 in 1930 to 21,000 in 1955. Apart from the growth 
of traditional types of enterprises (food, beverages, textiles, and 
leather), there was also substantial progress in heavier industries 
(chemicals, oil refining, metallurgy, machinery, and electrical 
equipment). Workers earned good wages, and production increased 
more rapidly than employment, meaning that labor productivity 
was on the rise. During the 1940s, industrial output overtook live- 
stock raising as a share of GDP. 

But the industrial boom was short-lived. One sign of trouble was 
the fact that 90 percent of manufactured goods were consumed 
within Uruguay. Because domestic industries had grown up behind 
high tariff barriers, they were not competitive on world markets. 
This common shortcoming of the import- substitution industriali- 
zation strategy was particularly serious, given Uruguay's small in- 
ternal market. Although income distribution was equitable, the 
potential for home-industry expansion was limited because con- 
sumption was limited. Most industries reached their full potential 
just two decades after the beginning of the industrialization process. 
During the mid-1950s, imports of machinery and industrial equip- 
ment that were essential for the further development of heavy in- 
dustry leveled off and then declined. Industrial growth ceased. With 
the stagnation of both industrial production and livestock produc- 
tion in the mid-1950s, Uruguay's economy entered what would 
be a twenty-year crisis. Real per capita income, which had grown 
rapidly during the early 1900s, increased at an average of only 0.5 
percent per year from the mid-1950s to the mid-1970s. The peri- 
od was characterized by declining exports, a negative balance of 
payments, decreasing reserves, and growing inflation. 



106 



The Economy 



The prolonged nature of the crisis, i.e., the two-decade lack of 
fundamental economic restructuring, had much do to with the 
government policies that were set in motion during the Batllist 
period. As two of the three pillars of Uruguay's economy (livestock 
and industry) crumbled, the third (the public sector) bore an in- 
creasing burden. State enterprises expanded until, by the 1960s, 
they generated 30 percent of GDP and paid 40 percent of all salar- 
ies. Once-dynamic state enterprises became expensive public works 
projects. Elaborate formulas were devised to allow Uruguay's two 
principal political parties — the Colorado Party and the National 
Party (Partido Nacional, usually referred to as the Blancos) — to 
dispense public-sector jobs in proportion to votes received. Eco- 
nomically, a change of the ruling party meant very little. Both par- 
ties were allied in upholding the social welfare model, which 
amounted to keeping the state enterprises and the bureaucracy 
afloat. To do so, they incurred a large foreign debt and penalized 
the livestock sector through domestic price controls. The economy 
turned inward through continued protectionism and artificially high 
exchange rates. As a result, the once- vital export sector could not 
develop the momentum required to pull the economy out of the 
doldrums. 

The protracted economic crisis became a political crisis in the 
late 1960s. Within Uruguay the welfare state government could 
provide no answers to the twin challenges of urban terrorism and 
growing inflation. Outside Uruguay military regimes in both of 
its larger neighbors (Argentina and Brazil) cast long shadows, and 
international economic conditions made the insulation of Uruguay's 
economy more difficult. As the military regime took power in 1973, 
two international economic factors were particularly relevant: the 
quadrupling of oil prices (Uruguay imported all of its petroleum) 
and the closure of European Community markets to imported beef. 
These factors helped convince the military government that a major 
restructuring of the economy was needed. 

Restructuring under the Military Regime, 1973-85 

The military government was at first able to redirect and revitalize 
the economy. During the first phase of stabilization and structural 
adjustment, from 1973 to 1978, government policies had two cen- 
tral goals: to reestablish an export-oriented growth policy and to 
eliminate inflation. In pursuit of the latter, the government tightened 
the money supply, sharply cut the public budget, and held real 
wages down. The effort was partially successful. Inflation declined 
from over 100 percent per year during the 1960s to about 50 per- 
cent per year in the 1973-78 period. To reorient the productive 



107 



Uruguay: A Country Study 

sectors of the economy, the government eliminated most price con- 
trols, lowered tariff barriers from a maximum of 346 percent in 
1974 to 180 percent in 1977, and subsidized exports. Foreign- 
exchange and financial markets were also made more liberal, in- 
creasing Uruguay's integration with world markets. The immedi- 
ate results were dramatic: from 1974 to 1978, GDP increased by 
an average of 3.9 percent per year, after two decades of stagna- 
tion. Real exports grew by 14 percent annually during the same 
period, and productive investment increased by 16 percent per year. 

Dissatisfied with some aspects of the economy's performance, 
however, the government again adopted several measures between 
1978 and 1982. These included passing a foreign investment act 
(designed to attract foreign investment), reducing government 
spending, and selling off a few state enterprises. 

Inflation, which had dropped below 40 percent in 1976 but had 
since increased again, remained the primary target of the new 
stabilization policies. Authorities believed that two factors were fuel- 
ing inflation: the influx of external funds (allowed under liberal- 
ized financial regulations) and the continuing price increases by 
local firms, still protected from foreign competition because tariffs 
had only been reduced partially. The government, then, saw con- 
tinued inflation as a problem caused by incomplete economic liber- 
alization and moved to accelerate reforms. Banks were largely 
deregulated as reserve requirements were eliminated and foreign 
currency deposits allowed. Import tariffs for most products were 
reduced, allowing increased foreign competition. Export subsidies 
were reduced or eliminated. In addition, the government began 
announcing moderate exchange-rate devaluations several months 
in advance in an attempt to slow inflation and discourage curren- 
cy speculation. 

These measures reduced inflation somewhat, but instead of 
stabilizing the economy, they disrupted the gradual process of eco- 
nomic recovery that had been under way for several years. Uru- 
guayan firms, many of which had reoriented production toward 
exports after 1974, faced rising internal costs when subsidies were 
removed. At the same time, they became less competitive abroad 
because devaluations did not keep pace with inflation. Banks 
responded to deregulation by making risky loans, many of which 
became nonperforming as the expansion slowed. The public deficit 
increased, especially when the government stepped in to rescue 
several major banks. External debt increased when the government 
was forced to borrow abroad. A second oil shock in 1979 (the first 
was in 1973-74) and an Argentine devaluation in 1981 both hurt 



108 



The Economy 



Uruguay's trade balance. As the restructuring process broke down, 
capital flight became rampant. 

The military government's attempt to regain economic stability 
during its last two years in office resulted in a severe recession. 
After increasing over several years to a high of 6.2 percent in 1979, 
GDP growth slowed to 1.9 percent in 1981 and plunged to - 9.4 
percent in 1982. Real GDP declined by one-sixth from 1982 to 1984. 
Unemployment increased to 13 percent, further increasing the bur- 
den on the nation's welfare system. During its last three years in 
office, the government's most significant accomplishment was far 
more modest than its earlier reforms: it reduced the public deficit 
from 18.4 percent of GDP in 1982 to 9.2 percent at the end of 1984. 

As the military government prepared to leave power after a tur- 
bulent twelve years, five major issues confronted economic plan- 
ners. First, the government had succeeded in reorienting production 
toward exports, but by the mid-1980s traditional export markets 
were growing less hospitable. For example, world beef prices had 
fallen, partly because of subsidized competition from the Europe- 
an Community. Second, the public sector, which played a large 
role in Uruguay's economy, faced a growing internal and exter- 
nal debt burden. This reduced savings available to finance private 
investment and made it difficult for the government to meet its 
social security obligations. Third, many firms and banks were finan- 
cially weak, the former because of debts incurred before the reces- 
sion and the latter because of nonperforming loans. Fourth, 
unemployment remained high. Finally, inflation, a primary tar- 
get of the attempted reforms, had increased from 50 percent in 1983 
to 72 percent in 1985. The first and second issues were concerned 
with enduring themes: the importance of livestock exports and the 
government's role in the economy. The third, fourth, and fifth is- 
sues were products of the reforms that had brought Uruguay out 
of stagnation without completely restructuring the economy. 

The Sanguinetti Government 

The civilian government that entered office in 1985 inherited 
an economy whose fundamental elements had not changed a great 
deal for many years. The economy was still based on agriculture. 
In 1988, midway through the Sanguinetti government's term of 
office, livestock, crop production, and fishing generated only 13 
percent of GDP direcdy. But the largest industries in Uruguay — 
food processing and textiles — depended on agricultural inputs. 
Thus, the link between agriculture and industry, which generated 33 
percent of GDP in 1988, was strong. Another inescapable feature 



109 



Uruguay: A Country Study 



GDP 1988 = US $7.9 billion 




TRADE- 
RELATED 
ACTIVITIES 



AGRICULTURE 
(INCLUDING 

FISHING, 
FORESTRY, 



INDUSTRY 
(INCLUDING 



AND 
LIVESTOCK) 
13% 



MANUFACTURING, 



CONSTRUCTION, 



ENERGY, 



AND MINING) 



33% 



SERVICES 
(INCLUDING 
BANKING AND 
FINANCIAL 
SERVICES, 
COMMERCE, 



COMMUNICATIONS, 



GOVERNMENT 
SERVICES, 



TOURISM, AND 
TRANSPORTATION) 
42% 



Source: Based on information from United States, Central Intelligence Agency, The World 
Factbook, 1989, Washington, 1989, 310; and Economist Intelligence Unit, Country 
Report: Uruguay, Paraguay [London], No. 1, 1990, 3. 

Figure 6. Gross Domestic Product (GDP) by Sector, 1988 

of the economy was the central role of government. Uruguayan 
national statistics included the government, which comprised not 
only agencies such as the Ministry of National Defense and the 
postal service but also, within the service sector, a large commer- 
cial bank and several insurance companies. The entire service 
sector — including activities such as private banking, transportation, 
and tourism — accounted for 42 percent of GDP. The external sec- 
tor, i.e., activities involving foreign trade, generated the remain- 
ing 12 percent of GDP (see fig. 6). 

The record of the Sanguinetti government was moderately suc- 
cessful. The administration entered office facing an economy just 
beginning to recover from a severe recession. That recovery con- 
tinued, as real GDP growth averaged over 5 percent per year dur- 
ing the administration's first two full years in office (see table 9, 
Appendix). During 1988 and 1989, however, real GDP growth 
nearly ceased. In other areas, the record was similar. Unemploy- 
ment fell from 13 percent in 1985 to 9 percent in 1987 but was 
reduced no further. Inflation fell at first, then increased again. 



110 



The Economy 



The lack of sustained economic progress during the late 1980s 
was not simply a result of the Sanguinetti government's policies, 
however. The government and the private sector inherited many 
serious difficulties in the mid-1980s: the growing external debt, a 
large government bureaucracy in deficit, a burdensome social secu- 
rity system, and a weakened currency. Because they could not im- 
mediately change these features, the government and the private 
sector chose to begin a cautious policy of readjustment. Fundamen- 
tal restructuring was again delayed. 

Economic Policy 

Government policy has greatly influenced the development, or 
lack of development, of Uruguay's economy during the twentieth 
century. The government first became an important regulator of 
economic activity when it arranged for a portion of livestock ex- 
port earnings to be transferred to the urban working class. As its 
interventionist role expanded during the early 1900s, the central 
government became the administrator of an elaborate social wel- 
fare system that was generous by Latin American standards. After 
the Great Depression, the government enacted tariff policies to pro- 
mote domestic manufacturing and adopted the strategy known as 
import- substitution industrialization. The state also became an im- 
portant participant in the economy. In a pattern repeated elsewhere 
in Latin America, the central government nationalized or estab- 
lished several of the largest service and manufacturing companies 
in the country (see Industry, this ch.). It became the single largest 
employer and producer in the nation. 

The level of government involvement in the economy took on 
increasing significance after Uruguay entered a period of economic 
stagnation. When export earnings leveled off in the 1950s, the state's 
two roles in the economy became difficult to sustain yet vital to 
the population. Growing numbers of unemployed persons and 
retirees depended on the social welfare system, even as government 
revenues used to support that system declined. In addition, the over- 
all economic slowdown made public- sector employment extremely 
attractive. Public employment, which was controlled by political 
parties rather than market forces, increased at 2.6 percent per year 
during 1955-61 , while private- sector employment grew at only 0.9 
percent. Government consumption expenditures for salaries and 
services remained high, but public investment was scaled back, 
penalizing future productivity. Despite this shift in the spending 
pattern, the state's income did not keep pace with its expenditures. 
By the 1960s, a public-sector deficit had developed, requiring bor- 
rowing from abroad and helping to fuel inflation. 



Ill 



Uruguay: A Country Study 



The public-sector deficit was the hallmark of Uruguay's stag- 
nated economy in the 1960s. Thereafter, efforts to reduce the deficit 
were a central feature of structural reforms. However, the web of 
government commitments within the economy — involving both ad- 
ministrative and productive activity — made this a difficult task. The 
military government (1973-85) partially succeeded at the larger 
task of reorienting the economy toward world markets but made 
only modest headway against the public-sector deficit. During the 
second half of the 1980s, the deficit was at first reduced but then 
increased again in the last two years of the Sanguinetti adminis- 
tration. 

Fiscal Policy 

The civilian government that entered office in 1985 faced a se- 
vere fiscal problem: the chronic public-sector deficit. It also faced 
a broader difficulty: an economy in deep recession. The deficit was 
believed to be perpetuating inflation. Inflation, in turn, prevented 
the economy from reaching a stable position conducive to renewed 
growth. Thus, the priorities of the Sanguinetti administration's eco- 
nomic plan — devised in cooperation with the International Mone- 
tary Fund (IMF — see Glossary) — were to reduce the deficit, bring 
down inflation, and improve the balance of payments. 

These multiyear fiscal measures were considered essential for 
renewed growth, but the serious consequences of the recession called 
for immediate action to spur economic activity. Between 1981 and 
1984, the recession had taken its toll on all sectors of the economy. 
GDP had declined by almost 17 percent; agricultural production 
by 12 percent; manufacturing by 21 percent; construction by 48 
percent; and capital formation (investment) by 56 percent. Work- 
ers were especially hard-hit by the decline. Between November 1982 
and March 1985, real salaries fell by 19 percent. In real terms, 
workers earned only half of what they had earned in 1968, and 
unemployment had increased to 13 percent. Unable to ignore these 
signs of distress, the Sanguinetti administration also adopted an 
economic growth policy. 

Initially, the stabilization effort took precedence over efforts to 
boost economic activity. The idea was to break the inflationary 
momentum of the economy first and restore growth second. In fiscal 
terms, the goal was to reduce the public-sector deficit from 10 per- 
cent of GDP in mid-1985 to 5 percent of GDP by 1986. The scope 
of government involvement in the Uruguayan economy meant that 
the public-sector deficit had to be attacked on three fronts: the cen- 
tral government, by reducing expenditures and increasing revenues; 
the Central Bank of Uruguay, which accounted for about half of 



112 



The Economy 



the deficit; and the state enterprises, many of which had run small 
deficits through most of the 1980s. 

The results of the stabilization effort were ambiguous. On the 
one hand, the Sanguinetti government easily reached its fiscal tar- 
gets. During its first two years in office, the government enacted 
tax increases that raised real government revenues by 58 percent. 
Meanwhile, real expenditures increased by only 43 percent (see 
table 10; table 11; table 12, Appendix). As a result, the public- 
sector deficit declined to about 3 percent of GDP, better than the 
government had planned. Simultaneously, however, inflation — 
the underlying target of the government's fiscal policy — hardly 
slowed at all. Inflation went from an annual rate of 72 percent in 
1985 to 57 percent in 1987, but it increased to 85 percent in 1989. 
The persistence of inflation in the face of fiscal restraint did not 
reflect a failure of the Sanguinetti government's fiscal policy; rather, 
inflation persisted because of the government's monetary and 
exchange-rate policies, the instruments it used to promote economic 
growth (see Monetary and Exchange-Rate Policy, this ch.). Fiscal 
policy was also inadequate because the government expanded the 
money supply to pay for the fiscal deficit (8.5 percent by the end 
of 1989). 

Monetary and Exchange-Rate Policy 

The Sanguinetti administration turned to Uruguay's formerly 
strong export sector in devising its strategy for renewed economic 
growth. Through a combination of exchange-rate policy, liberal 
credit to exporters, and cultivation of new markets, the govern- 
ment hoped to revitalize the traditional export sector (primarily 
beef and wool) and promote the manufacture of nontraditional ex- 
ports such as apparel. 

The most important policy tool was the exchange rate. Initially, 
the government planned to allow the peso to float freely, in keep- 
ing with its philosophy of minimal market intervention. In prac- 
tice, however, the monetary authorities carried out a "dirty float," 
repeatedly entering the currency market to lower the exchange rate 
of the peso. Devaluation translated into increased competitiveness. 
For a small country like Uruguay, facing world (United States dol- 
lar) prices for goods, a devaluation of the peso (more pesos per 
dollar) meant that an exporter would receive more pesos for a given 
quantity of goods. This effectively raised the profitability of ex- 
ports (leaving aside other effects) and encouraged the growth of 
the sector. 

Exports and GDP both increased after 1985, partly as a result 
of the more competitive exchange rate. But the policy also had 



113 



Uruguay: A Country Study 



1988 WORK FORCE = 1.3 MILLION 



SERVICES AND 
OTHER ACTIVITIES 
20% 



TRADE AND 
COMMERCE 
12% 




PUBLIC SECTOR 

30% 



AGRICULTURE 
(INCLUDING 
FISHING, 
FORESTRY, AND 
LIVESTOCK) 
15% 




INDUSTRY 
(INCLUDING CONSTRUCTION, 
ENERGY, MANUFACTURING, 
AND MINING) 
23% 



Figure 7. Employment by Sector, 1988 



inflationary effects that counteracted the government's restrained 
fiscal policy. The government's intervention in the currency mar- 
ket consisted of buying foreign exchange and selling pesos. This 
raised the supply of pesos and lowered their price relative to other 
currencies (the exchange rate). But the intervention also increased 
the foreign-exchange component of the money supply, thus fuel- 
ing inflation. The government attempted to compensate for this 
increase in the monetary base by decreasing other components of 
the money supply, a policy known as sterilization. However, an 
increasing share of Uruguayan bank deposits were denominated 
in United States dollars rather than pesos. Thus, the efforts to re- 
strict the peso monetary base had little effect on the overall money 
supply, which continued to increase. As a result, the government 
could not fine-tune its export-promotion strategy to eliminate in- 
flationary effects. Inflation persisted despite the decline of the public- 
sector deficit. In short, the government's notable accomplishments 
on the fiscal side were largely negated on the monetary side. 

Labor 

The labor force in Uruguay was small (1.4 million in 1990), about 



114 



The Economy 



80 percent urban, and educated at least to a high school level. In 
1988 about 30 percent of workers were employed in the public sec- 
tor, 23 percent in industry, 15 percent in agriculture, 12 percent 
in trade and commerce, and 20 percent in services and other activi- 
ties (see fig. 7). During the 1970s, workers experienced a sharp 
decline in real wages, which they only partially regained in the 
1980s. The problems of the labor force, reflecting the overall difficul- 
ties of the Uruguayan economy, led to widespread strikes and un- 
rest that hindered economic growth during the 1980s. In view of 
Uruguay's fundamental structural difficulties, an accommodation 
with the labor movement remained an important issue for the 
government. 

The Labor Movement 

Several of the uncommon economic and political characteristics 
of Uruguay influenced the development of its labor movement dur- 
ing the early 1900s. First, because the only sizable concentration 
of workers was in Montevideo, the labor movement was largely 
restricted to that city and was thus not really a national phenome- 
non. Second, the small number of workers employed by most in- 
dividual firms limited the tendency of workers to form mass 
organizations. Third, the government played a central role in labor 
policy. State enterprises and government organizations became the 
nation's largest employer. In addition, legislation established many 
private- sector labor policies that preempted organized labor. 

Uruguay's laborers, like the economy as a whole, made great 
strides during the early decades of the 1900s. Ironically, this progress 
slowed the growth of a cohesive labor movement. President Batlle 
y Ordonez, who firmly supported the working class and the right 
to strike, was an important figure for laborers during this period. 
His ideology of Batllism — in sharp contrast to the repression of labor 
in many other Latin American nations — aimed to reconcile labor 
and capital, or employees and owners. The Batllist government 
created the Office of Labor and ensured that a share of the increas- 
ing livestock export earnings was transferred to the urban work- 
ing class. By the late 1920s, legislation limited the workweek and 
workday, established a minimum wage, and required that benefits 
be paid to injured or retired laborers. This congenial atmosphere 
gained the official labor movement only limited support. In 1926, 
for example, only 6,000 out of 65,000 industrial workers were dues- 
paying union members. 

The cordial relationship between labor and government deteri- 
orated as Uruguay's economic growth stalled in the 1930s. The 
government became less tolerant of unions. The unions, in turn, 



115 



Uruguay: A Country Study 



became more militant. Communism replaced anarchism as the 
dominant political ideology of labor leaders. During and after World 
War II, a sometimes-violent split between the communist and non- 
communist labor elements developed. This ideological division 
prevented the labor movement from speaking with one voice and 
limited its national impact. In contrast to Argentina, where the 
Peronist labor movement gained great political power during the 
1950s, the labor movement in Uruguay remained fragmented. 

An important question for the labor movement in Uruguay has 
been whether public- sector workers have the right to strike. Govern- 
ment employees — both in government agencies and in state 
enterprises — constituted the largest group of salaried workers in 
the country. Thus, the government's civil-service wage policy set 
the tone for wages in general. The government also participated 
directly in setting private- sector wage policy, along with unions 
and owners, through the tripartite advisory boards — the wage 
councils — established in the 1940s. When public employees tried 
to strike, the government responded harshly. After a 1952 strike 
in the petroleum refinery, for example, the government enacted 
a mild form of martial law. 

The confrontation between government and labor became 
pronounced in the late 1960s. The Communist Party of Uruguay 
had come to dominate the unions after the Cuban Revolution, and 
the unions' objectives were as much political as they were economic. 
The government would not tolerate labor's leftist political program, 
especially given the charged atmosphere of the period. Nor was 
the government in a position to fulfill the unions' wage demands; 
a wage and price freeze was imposed, and the wage councils were 
abolished in June 1968. Strikes and repression became frequent. 
The confrontation reached its climax in 1973, when the major labor 
group, the National Convention of Workers (Convention National 
de Trabaj adores — CNT), organized a general strike to protest the 
military coup. The strike — the labor movement's last stand — 
dissolved within two weeks. The military regime that seized pow- 
er in 1973 outlawed the CNT and arrested its leaders. Union ac- 
tivity ceased for almost ten years. During the 1970s, 12,000 
public-sector workers and at least 5,000 private- sector workers were 
dismissed because of their trade union or political activities. 

The military government allowed unions to resurface in 1981 
through the Law of Professional Associations. Labor organizations 
were allowed to exist on three levels: by individual enterprise, by 
occupational category, and on a national scale. But the govern- 
ment took pains to depoliticize the labor movement. The secret 
ballot was to be used on the individual enterprise level, both for 



116 



The Economy 



election of leadership and for strike votes. Leaders of previously 
outlawed organizations were admonished to limit their political ac- 
tivity. The law's timing was more important than these limitations, 
however. As economic activity slowed during the 1981-84 reces- 
sion, union activity was minimal. Nevertheless, the unions did play 
a role in the "democratic counteroffensive" that led to the resto- 
ration of civilian rule in the mid-1980s. Successful general strikes 
before and after Sanguinetti's election helped dissuade the mili- 
tary from interfering in the political process. 

Relations between labor and government were delicate during 
the Sanguinetti administration (see Political Forces and Interest 
Groups, ch. 4). The framework for relations was established be- 
fore the civilian government took office, during the 1984-85 peri- 
od of multiparty consultations, officially called the National 
Conciliatory Program (Concertacion Nacional Programatica — 
Conapro). A working group recommended that the incoming 
government adopt a three-part policy toward labor: repeal of the 
legislation that restricted union activity and collective bargaining; 
reinstatement of all public-sector employees who had been dismissed 
by the military regime for their union activity; and restoration of 
workers' purchasing power through periodic wage increases, but 
in a manner consistent with bringing down inflation. The new 
government quickly complied with the first two recommendations, 
but the third became a contentious issue. 

Government Policy 

The Sanguinetti administration attempted to balance the clear 
need to increase wages with the equally pressing requirement to 
control inflation. Thus, the government immediately declared a 
wage increase in March 1985 but took action designed to control 
future wage increases. The tripartite wage councils were reestab- 
lished to negotiate wages every four months for nonagricultural 
private- sector employees. The councils at first adopted wage in- 
creases that were slightly higher than inflation, so that real wages 
at the end of 1985 were an average of 15 percent higher than the 
year before. Nevertheless, there was a great deal of labor unrest: 
over 900 strikes occurred between March 1985 and September 1986. 
Workers were apparently frustrated by the slow increases in real 
wages and anxious to express their displeasure after a decade of 
repression. 

After 1986 the number of labor disputes decreased, partly be- 
cause of the government's bargaining strategy. The government 
tried to control wage increases by persuading all private- sector 
unions to sign twenty- to twenty-four-month contracts under which 



117 



Uruguay: A Country Study 



wages would be adjusted according to conditions within individual 
companies. This action helped lower the level of conflict between 
labor and government, but it may have made the task of restrain- 
ing wage increases more difficult. In exchange for accepting longer 
wage contracts, unions demanded that workers be protected against 
inflation through "indexation," or automatic wage increases, to 
compensate for inflation. In 1986 about one-third of all workers 
were covered by indexed contracts; by the end of 1988, over half 
were. When Sanguinetti proposed in mid- 1988 that wage increases 
be held to 90 percent of inflation, instead of the 100 percent or 
greater that unions had become accustomed to, most of the na- 
tion's work force joined a one-day work stoppage in protest. The 
position of workers was understandable: their average real wage 
(purchasing power) remained below its 1968 level (see Blue-Collar 
Workers, ch. 2). The wage issue, particularly the question of 
whether indexation was compatible with an anti-inflationary poli- 
cy, was still unresolved when Lacalle took office in 1990. 

Agriculture 

Agriculture played a central role in Uruguay's economy. In 1988 
agricultural activity (including fishing) directly generated 13 per- 
cent of GDP and provided over half the value of exports. Indirect- 
ly, agriculture was responsible for a much higher proportion of both 
GDP and exports. Many of Uruguay's most dynamic manufac- 
turing enterprises — such as its tanneries and textile mills — depended 
on agricultural inputs. The close relationship between agriculture 
and manufacturing had a significant impact on Uruguay's economic 
development. For example, the sluggish performance of the large 
livestock sector in the 1980s contributed to slow overall economic 
growth (see table 13, Appendix). 

Agricultural Stagnation 

A troubling issue for the agricultural sector was the stagnation 
of production levels over several decades. Total agricultural produc- 
tion increased at an average rate of less than 1 percent per year 
from the 1950s to the 1980s. In 1989 the sector continued a 1 per- 
cent growth rate. This low growth was usually attributed to a lack 
of technologically advanced production methods, but that descrip- 
tion applied mainly to the large livestock sector. Ranchers continued 
to rely on extensive production methods. By contrast, many crop 
and citrus farmers had adopted more advanced technology, using 
tractors, fertilizers, and pesticides. Similarly, poultry producers re- 
lied on advanced techniques, and some dairy farmers fertilized their 
pastures. 



118 



The Economy 



Alternative explanations of the agricultural sector's poor per- 
formance take note of the overall characteristics of Uruguay's econ- 
omy. First, the small size of the internal market had forced most 
agricultural producers to be exporters. Agricultural products had 
become an important source of foreign exchange, but fluctuations 
in world prices and markets buffeted Uruguay's externally oriented 
agricultural sector. For example, wool prices fell when synthetic 
fabrics were developed. Additionally, the market for Uruguayan 
beef contracted when the European Community began subsidiz- 
ing its beef producers in the 1980s. 

A second reason for the lack of agricultural growth may have 
been the inconsistency of government policy. During the protec- 
tionist import-substitution industrialization phase in the 1950s, the 
government held agricultural prices down in order to lower indus- 
trial labor costs. This discouraged both agricultural production and 
investment. During the 1960s, the government reversed this pric- 
ing policy when it encouraged the export of certain agricultural 
products (poultry, dairy, and citrus products) through subsidies 
and other incentives. However, this export policy was itself reversed 
in the 1970s, in keeping with the military government's effort to 
open the economy to foreign competition. The abrupt withdrawal 
of subsidies made the production of several products unprofitable. 
With government policy toward it fluctuating in this manner, 
agriculture in Uruguay was on uncertain ground, and potential 
investors remained wary. Aided by a recovery in the livestock sec- 
tor, however, agricultural output increased by an estimated 3.5 
percent in 1990. 

Land Use and Tenure 

The general characteristics of Uruguay's land area helped de- 
termine the pattern of land use. The countryside is devoid of 
mountains — in contrast to most other Latin American nations — 
and is only 2 to 3 percent forested. Over 80 percent of the land 
can be used for some kind of agriculture. The natural grasslands 
for which Uruguay is famous lend themselves to the predominant 
agricultural activity: livestock production. 

Although the land and temperate climate facilitated livestock 
production, the limited fertility of the soil hindered the produc- 
tion of crops. Livestock ranches covered three-quarters of the to- 
tal land, especially in the departments of Artigas, Cerro Largo, 
Durazno, Flores, Lavalleja, Maldonado, Paysandu, Rivera, Rocha, 
Salto, and Tacuarembo (see fig. 1). The most productive wheat - 
and cereal-farming area was the southwest (Colonia, Rio Negro, 
and Soriano departments); most of the rice was produced in the 



119 



Uruguay: A Country Study 

east (Treinta y Tres Department); and fruits, vegetables, and wine 
were produced in the departments of Canelones, Florida, and San 
Jose. 

Uruguay was no exception to the Latin American pattern of con- 
centrated landownership, but its small population had kept land 
distribution from becoming a major political issue. Agricultural 
enterprises could be roughly divided into two types, whose charac- 
teristics in the mid-1980s reflected the concentration of landowner- 
ship and helped explain Uruguay's urban tendencies. The first type, 
family-operated (owned or rented) farms and ranches, made up 
85 percent of agricultural enterprises in the country, employed 68 
percent of rural workers, and produced 45 percent of all agricul- 
tural output. But this type of enterprise controlled only 25 percent 
of agricultural land (farming and livestock). The second type, larger 
commercial enterprises, controlled 75 percent of the land, employed 
32 percent of rural labor, and produced 55 percent of output. These 
statistics indicate that smaller enterprises made more productive 
use of the land. However, the fact that such family-operated farms 
and ranches employed mostly family members rather than salar- 
ied workers tended to limit the development of the rural econo- 
my. The larger enterprises, by contrast, were mostiy extensive 
livestock ranches that had little need of hired labor. As this second 
type of enterprise became more prevalent throughout the twen- 
tieth century, landownership became more concentrated, and the 
population of the countryside declined. 

Agricultural production employed only about 1 5 percent of Uru- 
guay' s labor force in the late 1980s. The agricultural work force 
declined steadily as the number of small agricultural enterprises 
diminished. There were 87,000 farms and ranches in 1961, 77,000 
in 1970, and only 57,000 in 1986. The importance of family- 
operated establishments is clearly seen in rural labor statistics. In 
1980 two-thirds of the 160,000-person agricultural labor force was 
made up of landowners or their relatives; only 57,000 workers were 
wage earners. Not surprisingly, the labor movement had little im- 
pact on rural workers, although both the rice workers and the dairy 7 
workers were organized into unions. 

Livestock Ranching 

Uruguay's livestock herds did not expand appreciably after 1930. 
In 1908 there were 8 million catde and 26 million sheep in the coun- 
try. In 1981 the number of cattle peaked at 11 million, while the 
number of sheep had declined to 20 million. Because the land area 
dedicated to livestock raising has not changed significantly, these 
figures illustrated the lack of progress in the sector. The single 



120 



Herding cattle in Treinta y Tres 
Department 
Courtesy Inter-American 
Development Bank 



Inspecting a beef carcass 
in Melo 

Courtesy Inter-American 
Development Bank 



Uruguay: A Country Study 

largest investment in cattle herds was complete by 1930, when 
Herefords were substituted for the original mixed breeds. Exten- 
sive ranching methods facilitated livestock raising because little in- 
vestment was required. But these methods also limited the carrying 
capacity of the land and the size of the stock. By the 1970s, it took 
twenty-six Uruguayan cattle to yield one ton of beef, compared 
with about eighteen in Argentina and about thirteen in the Unit- 
ed States or Western Europe. The production of wool and mutton 
per head of sheep was also low: 3.5 kilograms of wool per head, 
compared with over 5 kilograms per head in Australia or Argentina. 
In addition, both cattle and sheep herds were subject to losses be- 
cause of limited efforts to prevent disease. 

The vulnerability of the range-fed livestock herds was further 
demonstrated in the late 1980s when Uruguay experienced a se- 
vere drought. Millions of animals died or had to be slaughtered 
prematurely. The drought lasted longest in the center of the coun- 
try, where most of the largest cattle ranches were located (the depart- 
ments of Cerro Largo, Durazno, and Tacuarembo). The leading 
sheep-ranching departments in the northwest (Artigas and Salto) 
were not as severely affected. 

Raising sheep for wool in Uruguay became less profitable dur- 
ing the 1960s. There was increasing worldwide competition from 
petroleum-based synthetic fibers. After the oil price increase in 1973, 
however, wool was once again in favor. Production surged from 
about 61,000 tons per year in the mid-1970s to 87,000 tons in 1986. 
Wool surpassed beef as Uruguay's most valuable export in the early 
1980s. It also supplied the growing woolen textile and apparel in- 
dustry, which earned additional foreign exchange. 

Sheep, whose stock increased to almost 26 million by 1989, were 
also raised for lamb and mutton. The potential for Uruguay's ex- 
port of sheep meat in 1989 was about 3 million head, as compared 
with annual exports of about 2 million head in the early 1980s. 
However, a severe drought in the first half of 1989 reduced the 
performance of this subsector by about 10 percent during that 
period. 

Rising world beef prices stimulated the Uruguayan cattle industry 
in the late 1970s. At first, rising prices increased the profitability 
of cattle ranching but ultimately led to considerable instability in 
the sector. When many ranchers expanded their herds after the 
1978-79 beef price increases, the price of pastureland grew almost 
tenfold. Because real interest rates were low or negative, ranchers 
were willing to borrow heavily to increase their landholdings. But 
beef prices soon leveled off, and many ranchers were left with large, 
unpayable debts. Land prices fell sharply; banks could not cover 



122 



The Economy 



their loans even by foreclosing. As the bank crisis mounted, the 
Central Bank stepped in to provide refinancing in United States 
dollar-denominated loans. Most ranchers avoided bankruptcy but 
had to slaughter record numbers of cattle to service their debts. 
Many ranchers took the opportunity to switch to sheep ranching 
because wool appeared to face more stable world demand. Thus, 
Uruguay's cattle herds declined by 20 percent from 1981 to 1984. 

Cattle ranchers rebuilt their herds during the latter half of the 
1980s but were hindered by limited credit and severe drought. 
Damage from the prolonged drought had reached alarming propor- 
tions by the end of 1989, when the cattle stock was down to 9.4 
million head. The number of cattle fell by 738,000 head between 
June 1988 and June 1989, the largest annual drop in fifteen years. 
About 2 percent of the total had died, and the rest had been killed 
and sold (50 percent more than usual). In the July- November 1989 
period, the beef cattle herd was depleted by an additional 622,000 
head. The increased slaughter rates allowed meat-packing plants 
to pay less for beef, decreasing ranchers' profits. 

The continuing difficulty in the sector prompted the government 
to launch Operation Manufacture in March 1989. The program 
eased the ranchers' financial burden by extending them a special 
line of credit, lowering their tax rate by 20 percent, and providing 
for case-by-case assistance. The government also announced the 
opening of a line of credit with terms of up to eight years for herd 
replacement. Sheep ranchers, who suffered fewer losses from the 
drought, were not eligible for these government programs. 

The dairy industry, based in the departments near Montevideo, 
expanded considerably in the 1980s. Milk production increased 
from 400,000 tons in 1979 to 635,000 tons in 1987. Even though 
many dairy farmers still relied on natural pastures, limiting the 
milk output per cow, Uruguay was more than self-sufficient in dairy 
products and exported to other Latin American countries. Most 
domestic milk processing and marketing was controlled by the Na- 
tional Dairy Products Cooperative, which distributed dairy products 
throughout the country. 

Crop Production 

Crop production in Uruguay has never been as important as live- 
stock raising. Only about 8 percent of the land area was dedicated 
to growing crops in the mid-1980s, compared with 75 percent dedi- 
cated to livestock. The amount of land under cultivation has varied 
according to the world price of livestock products. When beef prices 
have declined, for example, ranchers have planted wheat or corn. 
Rising livestock prices in the 1980s resulted in a considerable 



123 



Uruguay: A Country Study 



decrease in the area dedicated to most crops. Because crop produc- 
tion had gradually become more efficient through mechanization, 
however, crop yields did not necessarily decline. 

Although crop yields per hectare had generally increased, ero- 
sion of the thin topsoil layer became a significant problem in Uru- 
guay during the 1980s. It was estimated that 30 percent of all arable 
areas had been adversely affected. The ill effects were most seri- 
ous in areas that had been under continuous cultivation for long 
periods. 

Rice surpassed wheat as Uruguay's most significant crop in the 
1980s. In contrast to the general downward trend in farmed land 
area, the land dedicated to rice production increased from 55,000 
hectares in 1980 to 81,000 hectares in 1988. Over this same peri- 
od, production rose from 228,000 tons to 381,000 tons, a 67 per- 
cent increase. Only about 40,000 tons were consumed domestically; 
most of the rice was exported. The preferred farming system for 
rice production was closely connected to livestock raising. Rice was 
grown for two years; then the land was sown as pasture for four 
or five years to renew the fields and provide grazing for cattle. The 
most common variety produced was the American "Blue Belle" 
type. The drought that gripped Uruguay in 1988-89 caused rice 
producers to lose an estimated 6 percent of their crop, worth about 
US$2.4 million. The hardest hit areas were in the north, in the 
departments of Artigas, Rivera, and Tacuarembo. 

Wheat production and hectarage both declined during most of 
the 1980s. This decline reflected the increasing land area dedicat- 
ed to livestock production and the fact that Uruguayan wheat 
producers could not effectively compete with wheat producers in 
other countries. International competition became more important 
after the government discontinued its subsidies for wheat farmers 
during the economic liberalization of the 1970s. Uruguay was no 
longer self-sufficient in wheat production by the mid-1980s, when 
about 80,000 tons per year were imported. Wheat farming was 
largely mechanized by the 1980s, but advanced tractor equipment 
acted mainly to reduce the labor requirement on farms, rather than 
leading to huge production increases. Most farmers made only 
limited use of pesticides and fertilizers. Thus, wheat production 
per hectare was below that of most other countries. Nevertheless, 
the area dedicated to wheat farming rose in 1989, and production 
was expected to begin increasing again. Indeed, wheat production 
grew to 414,000 tons in 1988. 

Corn production stagnated during the 1980-88 period. Like 
wheat farmers, corn farmers were adversely affected by the govern- 
ment's freeing of agricultural prices in the late 1970s. Unlike wheat, 



124 



The Economy 



however, corn was not an important commercial crop; farmers used 
it primarily to feed their animals. No longer self- sufficient, Uru- 
guay imported almost US$2 million worth of corn in 1988. Some 
farmers had substituted sorghum cultivation for corn because it 
provided roughly the same nutrition as corn but better withstood 
drought conditions. 

Other crops produced in Uruguay in the 1980s included barley, 
soybeans, oats, sunflowers, peanuts, sugarcane, potatoes, flax, and 
cotton. Barley, soybeans, and sunflowers were produced mainly 
for export; the other crops were produced on only a small scale 
for the domestic market. Production of sugar was uneconomical, 
relying on a large government subsidy. Uruguay imported cotton 
(US$6.6 million in 1988) for its textile industry. 

Citrus farming was a bright spot on the agricultural horizon in 
the 1980s. Citrus and produce farms were originally established 
around Montevideo to supply the city with fruits and vegetables. 
During the 1980s, these farms expanded, allowing Uruguay to be- 
come a net exporter of citrus fruit (oranges, lemons, and grapefruit). 
The exported value increased from US$5 million in 1980 to US$21 
million in 1986. One large-scale citrus plantation added packing 
facilities and a juice-and-oil plant, with at least half of its produc- 
tion intended for export. The government encouraged such diver- 
sification of agriculture. 

Fishing 

Uruguay first began to develop a fishing industry in the 1970s. 
Previously, fishermen from other countries had taken advantage 
of the rich resources off Uruguay's coast, but there was no con- 
certed national fishing effort. The military government enacted the 
five-year National Fishing Development Plan in 1974 as part of 
its attempt to develop new economic activities with export poten- 
tial. Under the plan, administered by the government's National 
Fishing Institute, fishing expanded markedly. By the late 1980s, 
there were over 700 fishing vessels in the fishing fleet, compared 
with only 300 in 1974. Furthermore, the number of large ocean- 
going vessels increased from five to seventy during this period. 
Oceangoing vessels held more fish and allowed longer voyages to 
distant waters. The latter capability became important after most 
nations (including Uruguay and neighboring Argentina) extend- 
ed their exclusive economic zone from 3 to 200 miles in the 
mid-1970s, restricting access to many coastal fisheries. As the fishing 
fleet expanded, port facilities were improved. The port facilities 
of Montevideo, Piriapolis, and Punta del Este were modernized, 
and an entirely new port was constructed at La Paloma. 



125 



Uruguay: A Country Study 

The intensified fishing effort produced favorable results; the catch 
grew from 16,000 tons in 1974 to 144,000 tons in 1981, remaining 
at about 140,000 tons per year in the late 1980s. Not all aspects 
of the government's plan were successful, however. It called for 
sizable catches of species that could be processed (canned) for ex- 
port, such as tuna and sardines. As of 1987, however, fishermen 
were only catching a few hundred tons of tuna per year, not enough 
to supply a cannery. The sardine catch was also very small. 
Although those two species proved difficult to catch, Uruguay's 
fishermen had success catching Argentine hake, Atlantic croaker, 
and striped weakfish. The fish-processing industry also developed 
as the catch increased. Processing capacity in the late 1980s was 
about 250,000 tons, considerably above the estimated annual catch 
of 200,000 tons for all kinds of fish, except the anchovy. 

About half of Uruguay's catch was exported during the late 
1980s, in line with the government's goal of increasing nontradi- 
tional exports. Argentine hake (a whitefish similar to cod) was the 
leading export. In 1988, however, Uruguayan processing compa- 
nies reported that world prices for Argentine hake had fallen be- 
low production costs because of the competition from cod suppliers. 
Although prices later recovered, many companies began to process 
and export alternative species, such as anchovy, mullet, and blue- 
fish. The industry's exports reached US$81 million in 1987, as com- 
pared with US$65 million in 1986 and US$1.2 million in 1974. 
The United States imported 30 percent of Uruguay's fish; Brazil 
imported 23 percent; and Japan, the Federal Republic of Germany 
(West Germany), Saudi Arabia, and Israel each imported between 
4 and 6 percent. 

In 1990 an important issue for the Lacalle administration was 
Uruguay's access to the fisheries of the South Atlantic near An- 
tarctica, as well as to fishery resources in Argentina's coastal waters. 
Lacalle told Vision magazine in early 1990 that he strongly sup- 
ported the idea of an international conference, under the auspices 
of the Food and Agriculture Organization of the United Nations, 
to regulate fishing in the South Atlantic. 

Forestry 

In the 1980s, estimates of Uruguay's natural forest ranged from 
4,000 to 6,000 square kilometers of mostly small trees of limited 
or no industrial use; planted forest estimates ranged from 120,000 
hectares to 137,000 hectares of pine and eucalyptus. There were 
an additional 70,000 hectares of palm, poplar, salix (a genus of 
shrubs and trees), and other species. Sawmills were inefficient and 
small, with a capacity of fewer than thirty cubic meters a day. Of 



126 



Harvesting oranges near Paysandu 
Courtesy Inter-American Development Bank 

the 220,000 cubic meters of sawn wood consumed per year, Uru- 
guay imported about 66,000. Following the recovery of the con- 
struction industry from a recession in 1987, demand for sawn wood 
was increasing at a rate of about 2.5 percent per year in the late 
1980s. Domestic use of firewood was important, increasing from 
about 1.4 million cubic meters in the mid-1970s to 2.8 million cu- 
bic meters in the mid-1980s. Firewood demand was growing at 5 
percent a year in the late 1980s. A number of local industries con- 
verted to firewood from fuel oil for energy needs, resulting in sig- 
nificant savings. 

Industry 

Uruguay's industries, including construction, mining, and ener- 
gy, generated 33 percent of GDP in 1988. These industries un- 
derwent most of their development behind high tariff barriers in 
the 1950s. As a consequence, the industrial sector was geared mosdy 
to the domestic market. The small size of the internal market limited 
the growth of manufacturing and prevented many industries from 
achieving economies of scale. In addition, the substantial level of 
protection meant that Uruguayan consumers paid high prices for 
domestically produced goods, which faced no international com- 
petition. During the 1970s and 1980s, Uruguay's protectionist 



127 



Uruguay: A Country Study 

apparatus was partially dismantled, and industry began adjusting 
to the world market. 

Background of Industrial Development 

In the early twentieth century, Montevideo was home to many 
small artisanal workshops. These cottage industries were already 
protected by tariff rates of about 30 percent on most products. Rapid 
industrial growth did not occur until the 1930s, when the economic 
crisis caused by the Great Depression forced Uruguay, like other 
nations, to become more self-sufficient. Industry accounted for only 
12 percent of GDP in 1930 but increased to 22 percent by 1955. 
The most dynamic growth occurred after World War II. During 
the presidency of "industrial populist" Luis BatUe Berres (1947-51), 
the government encouraged the development of industry through 
several policies: multiple exchange rates were introduced to allow 
manufacturers to import essential machinery at subsidized rates; 
import tariffs on competing goods were raised to prohibitive lev- 
els; and urban wage increases stimulated domestic demand (see 
Neo-Batllism, 1947-51, ch. 1). Industrial output doubled during 
the decade following World War II. The timing of the expansion 
was favorable. For part of the period, wool exporters earned record 
profits because cold-weather uniforms were needed for the Korean 
War. A share of those profits financed the industrial sector's im- 
ports of capital equipment. 

The industrial boom was short-lived, however. Manufacturing 
output increased by only 14 percent between the mid-1950s and 
1970. For the industries geared to the internal market, the main 
problem was the small size of that market. The food-processing 
and textile companies, however, produced goods for export as well 
as for internal consumption. For these enterprises, the stagnation 
of the agricultural sector was a serious blow. As M.H.J. Finch ar- 
gues in his landmark study, A Political Economy of Uruguay since 1870, 
the lagging supply of agricultural inputs limited manufacturing out- 
put. The process of economic decline was circular: the decrease 
in exports meant lower domestic income and hence lower domes- 
tic demand for other manufactured products. Additional factors 
also contributed to the slowdown, such as the bias against exports, 
which was the result of an overvalued currency. In sum, import- 
substitution industrialization allowed manufacturing to increase, 
but only to a limited extent. More important, the policy insulated 
the economy and eroded much of Uruguay's capacity to export. 

The military government that assumed power in 1973 attempt- 
ed to revitalize the economy by reemphasizing exports. The govern- 
ment dismantled part of the protectionist structure surrounding 



128 



The Economy 



industry, lowered trade taxes, and created incentives for nontradi- 
tional exports. The results were at first dramatic. Industry grew 
at a rate of about 6 percent per year from 1974 to 1980. The most 
dynamic manufacturing growth involved relatively sophisticated 
goods: electrical appliances, transport equipment, textiles, paper, 
and nonmetallic minerals. Manufacturers invested in new technol- 
ogy, and labor productivity increased rapidly. Argentina and Brazil 
became important export markets for manufacturers, proving that 
Uruguayan industry could compete outside of its own borders. 

The expansion came to an abrupt halt in 1981, largely because 
of factors beyond industry's control. Macroeconomic instability — in 
part related to developments in the export markets of Argentina 
and Brazil — pitched the entire Uruguayan economy into recession. 
The reversal was particularly painful in the industrial sector be- 
cause manufacturers had borrowed heavily for investments and were 
overindebted as the recession began. Financial costs actually ex- 
ceeded labor costs for many manufacturing firms. Thus, lower real 
wages brought on by the recession were not enough to restore the 
firms' competitiveness. In 1983-84 the central government stepped 
in and took over part of the industrial sector's debt. This probably 
prevented widespread bankruptcies but also increased the public 
sector's financial burden. The lingering indebtedness of private 
firms was a major issue for the Sanguinetti government. 

Autonomous Entities 

The performance of the autonomous entities (autonomous agen- 
cies or state enterprises; see Glossary), which played a central role 
in Uruguay's economic development, was an even greater issue. 
Most of the autonomous entities were industrial or utility compa- 
nies; others were service related (see table 14, Appendix). The two 
largest autonomous entities were also the two largest companies 
in Uruguay: the National Administration of Fuels, Alcohol, and 
Portland Cement (Administracion Nacional de Combustibles, Al- 
cohol, y Portland — ANCAP) and the National Administration for 
the Generation and Transmission of Electricity (Administracion 
Nacional de Usinas y Transmisiones Electricas — UTE). In 1988 
ANCAP, whose primary activity was refining and distributing im- 
ported crude oil, grossed US$470 million, had profits of US$12 
million, and employed 6,700 workers; UTE grossed US$285 mil- 
lion, had profits of US$12 million, and employed almost 12,000 
workers. (Based on their 1988 gross earnings, ANCAP and UTE 
were the 113th and 242d largest companies in Latin America, 
respectively.) Other important autonomous entities (and monop- 
olies) included the National Administration of Ports (Administracion 



129 



Uruguay: A Country Study 



National de Puertos — ANP; another name for the Montevideo Port 
Authority), the National Telecommunications Administration (Ad- 
ministration National de Telecomunicaciones — ANTEL), and the 
State Railways Administration (Administration de los Ferrocarri- 
les del Estado— AFE). 

The Sanguinetti government's policy toward the state enterprises 
had two aspects. First, the government planned to invest US$1 bil- 
lion in public-sector projects during the 1987-89 period, raising 
government investment from 2.9 percent of GDP in 1986 to 5 per- 
cent of GDP in 1987-89. This target was not met, however. Pub- 
lic investment in 1987 and 1988 increased only to 3.1 percent and 
3.4 percent of GDP, respectively, because of the need to restrain 
spending. Second, the government planned to improve the fiscal 
health of the state enterprises, many of which were running deficits. 
A combination of utility rate increases and spending cuts (but no 
significant cuts in employment) made most state enterprises profita- 
ble by the late 1980s, easing the public-sector deficit slightly. 

Private Firms 

The two largest subsectors within manufacturing, both by out- 
put and by employment, depended on agricultural inputs. Food 
and beverage companies, which accounted for about 30 percent 
of the value of industrial output in 1987, included meat packers, 
soft drink companies, and wineries (see table 15, Appendix). These 
companies exported about one-third of their output. A new entry 
into the food-processing industry was the Azucitrus citrus plant 
in Paysandu, which opened in mid- 1988. The textile and apparel 
industry, accounting for about 20 percent of manufacturing out- 
put, depended on supplies of both wool and leather for jackets and 
footwear. The capacity to export was an important asset, allowing 
firms to withstand fluctuations in domestic demand. For example, 
the textile industry's sales to the domestic market decreased 23 per- 
cent in 1988, compared with 1987, but its exports increased 36 per- 
cent during the same period. Other important manufactured goods 
included chemicals, most of which were exported; transportation 
goods, including a few thousand automobiles and trucks that were 
assembled each year; and metal products. 

Construction 

Activity in the construction industry fluctuated dramatically dur- 
ing the 1980s, appearing to be markedly affected by trends in GDP 
growth or contraction, but with a one- or two-year lag. One index 
of such activity, the quantity of private structures built, went from 
about 2.1 million square meters per year in 1980-81 (when the 



130 



The Economy 



recession was beginning) to 500,000 square meters per year in 
1985-86 (after the recession had ended). In the late 1980s, con- 
struction partially recovered. The industry achieved a 4 percent 
growth in 1988 because of a construction boom in Maldonado and 
Punta del Este, and it grew 11.7 percent in 1989. Continued moder- 
ate growth was expected because of infrastructure projects such as 
the modernization of ports and highways, to be financed by inter- 
national organizations. An offsetting factor, however, was the 
government's need to reduce expenditures. 

Mining 

Mining has never played an important role in Uruguay's econ- 
omy. However, Uruguay has exported granite and marble. In ad- 
dition, semiprecious stones have been found in quantity. Investment 
in mining activities was expected to reach at least US$200 million 
during the first half of the 1990s. After Uruguay's General Assembly 
passed legislation allowing foreign investment in mining, two com- 
panies, Canada's Bond International Gold and Brazil's Minera- 
cao e Participacao (Mining Copartnership), announced plans to 
search for gold, silver, and other metals. Bond International Gold 
was given exclusive rights to develop the Mahoma gold mine, ex- 
pected to produce more than 900 kilograms per year. Part of the 
project was to be financed through a debt-for-equity conversion 
program. The National Mining and Geology Institute indicated 
that at least fourteen other areas in the- country might contain 
deposits of precious or base metals. 

Energy 

Hydroelectricity and imported petroleum were the primary 
sources of energy in Uruguay. During the 1980s, the nation reduced 
its dependence on imported crude oil and increased its hydroelec- 
tric capacity. At the beginning of the decade, three-fourths of Uru- 
guay's energy came from imported oil; by 1987 less than half did. 
This trend toward hydroelectric power was interrupted during 1988 
and 1989 because of a severe drought. Oil -burning power stations 
had to be brought on-line temporarily, increasing energy costs. In 
addition, rotating power outages were instituted in Montevideo 
and other cities. Partly because of such conservation measures, total 
consumption of energy actually decreased during the late 1980s. 
Real growth in the utilities sector declined by 12.2 percent in 1989. 

The single largest source of hydroelectricity was the Salto Grande 
Dam on the Rio Uruguay, built and operated in cooperation with 
Argentina. The US$1 billion dam was completed in 1982 and sup- 
plied 1.8 million megawatt-hours of energy to Uruguay in 1987 



131 



Uruguay: A Country Study 

(before the drought), or 40 percent of Uruguay's electricity. In 1989 
the huge project was reported to be facing serious financial difficul- 
ties. The Uruguayan and Argentine state-owned power compa- 
nies were US$45 million and US$250 million behind in payments, 
respectively, to banks and foreign creditors, and absorption of the 
debts by the two nations' central banks was expected. 

Three other hydroelectric power sources were located on the Rio 
Negro. Of these, the El Palmar Dam (located at Palmar), built 
and operated jointly with Brazil, was the largest and newest (in 
full operation since 1983); in 1988 it had a capacity of 330 mega- 
watts. The Baygorria Dam and the Gabriel Terra Dam (the latter 
in operation since 1948) had a capacity of 108 megawatts and 128 
megawatts, respectively, in 1988. 

The Sanguinetti administration's policy was to improve the ex- 
isting hydroelectric facilities rather than embark on new projects. 
Emphasis was placed on extending the electrical distribution net- 
work in rural areas. In 1988 the rural electrical network spanned 
1,400 kilometers, more than double the 630 kilometers in 1984. 
The government approved a total of US$139 million in investments 
in 1988-89 by UTE, mostly in the distribution program. 

Uruguay had no domestic oil resources, despite several explo- 
ration efforts. The nation imported mostly crude oil, which was 
then refined by ANCAP and a few small plants (see External Sec- 
tor, this ch.). In 1985 ANCAP had a refining capacity of 40,000 
barrels per day; its facilities were upgraded during the late 1980s. 

Services 

Uruguay's service sector, comprising the major subsectors of 
banking, transportation, communications, and tourism, as well as 
the activities of the large central government, accounted for 42 per- 
cent of GDP in 1988. Transportation, storage, and communica- 
tions together accounted for about 6 percent of GDP, while banking 
and commerce accounted for about 15 percent. Thus, half of the 
so-called service sector consisted of government activity. 

On the one hand, the service sector was a strong point in the 
economy because of the well-educated work force concentrated in 
Montevideo. On the other hand, the instability among banks, the 
lack of a modernized telecommunications system, and shortcom- 
ings in the nation's transportation infrastructure held back the sec- 
tor's development. In the second half of the 1980s, these issues took 
on increasing importance as the government began promoting the 
idea of Uruguay as an international service center for the Southern 
Cone (Argentina, Bolivia, Chile, Paraguay, and Uruguay). The 
growing potential to export services and to integrate them across 



132 




133 



Uruguay: A Country Study 



borders was considered a key element in the future development 
of Uruguay's outward-oriented economy. 

Banking and Financial Services 

Uruguay's banking sector was headed by the Central Bank of 
Uruguay (Banco Central del Uruguay; hereafter, Central Bank), 
founded in 1967 and charged with regulating the nation's bank- 
ing and financial system and performing such standard central bank 
functions as controlling the money supply, regulating credit, issu- 
ing currency, controlling foreign exchange, and overseeing the oper- 
ations of the nation's private commercial banks. The Bank of 
Uruguay (Banco de la Republica Oriental del Uruguay — BROU), 
founded in 1896, had performed some of the functions of a central 
bank prior to the creation of the Central Bank. An autonomous 
entity, it remained in 1990 the country's largest and most signifi- 
cant commercial bank. The banking sector also included the So- 
cial Welfare Bank (Banco de Prevision Social), the Commercial 
Bank (Banco Comercial), and several other state-owned banks, such 
as the Mortgage Bank of Uruguay (Banco Hipotecario del Uru- 
guay) and the State Insurance Bank (Banco de Seguros del Esta- 
do), as well as a number of private commercial and savings banks. 

In the late 1980s, Uruguay's financial sector was still feeling the 
effects of a profound banking crisis that had begun early in the 
decade. The crisis had its origins in the rapid expansion of credit 
to the private sector during the 1978-82 period. The unrestrained 
expansion of credit was made possible by the deregulation of the 
banks. As part of its effort to reorient the Uruguayan economy 
to the external market, the military government removed or reduced 
most restrictions on banks, including reserve requirements (which 
limit the amount of loans that can be made, relative to bank 
deposits), interest rate ceilings, and foreign currency regulations. 
The sudden removal of these and other restrictions encouraged 
banks to expand the supply of credit. The demand for credit also 
expanded because rising prices for exports convinced many ranchers 
and manufacturers to invest in land or equipment. The first signs 
of trouble came from the livestock sector. When world beef prices 
fell in 1980, rural land prices began to decline sharply, and ranch- 
ers began to have difficulty servicing their loans (see Livestock 
Ranching, this ch.). 

The crisis became widespread after the economy went into reces- 
sion in 1981 . By 1982 one-quarter of all loans to the private sector 
were considered nonperforming. The increasing dollarization of 
credit complicated the situation. Banks that had received large 
United States dollar deposits also made loans in dollars in order 



134 



The Economy 



to avoid exchange-rate risk. The trend toward dollarization in- 
creased in early 1982 because banks expected a major peso devalu- 
ation. By late 1982, about 60 percent of all loans were denominated 
in dollars. When the fixed peso exchange rate was finally aban- 
doned toward the end of the year, leading to a large peso devalua- 
tion, many already-troubled private companies, which earned pesos 
on the domestic market, suddenly faced dollar-denominated loans 
whose peso value had tripled. 

Government intervention was required to prevent widespread 
bankruptcies. BROU devised a two-part strategy for dealing with 
the crisis. First, it provided credit to the private banks so that loans 
could be refinanced. About one-fifth of all outstanding loans (worth 
US$400 million) were refinanced by late 1982, allowing debtors 
a two- or three-year grace period and a lengthened repayment sched- 
ule. The loans were still in dollars, however, so that further devalu- 
ations of the peso remained a difficulty for debtors. BROU's second 
action was to acquire many loan portfolios from the private banks. 
The government thus propped up several private banks, actually 
buying out four of the twenty-four banks in the country. This policy 
prevented a banking collapse but significantly increased BROU's 
obligations, making it responsible for a large share of the public- 
sector deficit. 

The financial sector remained in a precarious condition as the 
Sanguinetti government took office. By the end of 1984, the banking 
system had a negative net worth. In 1985, however, the banking 
system raised US$400 million in new dollar deposits. Although over- 
all economic conditions improved during the first three years of 
the Sanguinetti administration, credit remained restricted and in- 
terest rates high, making it difficult for even solvent borrowers to 
obtain new loans. The government continued its efforts to strength- 
en the banks. For example, it planned to spend US$160 million 
in 1989 to restructure the four banks bought during the height of 
the banking crisis so that they could be sold to the private sector. 
Critics charged that these banks were too highly indebted, ineffi- 
cient, and overstaffed to be sold. As of mid- 1989, all but one of 
the banks remained under the supervision of BROU, Uruguay's 
largest bank (a state enterprise). One bank, the Commercial Bank, 
was sold to a group of international investors in 1990. 

Dollarization of the banking system continued to increase. The 
proportion of money held in United States dollar accounts reached 
84 percent in 1989. The major source of these funds was Argenti- 
na, whose savers sought a safe haven and a dependable currency. 
Uruguayan savers placed deposits in dollars to avoid exchange- 
rate fluctuations. Thus, the openness of the banking system may 



135 



Uruguay: A Country Study 

have prevented some capital flight, but the dollarization of bank 
deposits made it difficult for the government to conduct a mone- 
tary policy because the money supply could not be tightiy controlled. 
Nevertheless, the government did not restrict the banking system 
to deposits in pesos, encouraging instead the further internation- 
alization of Uruguay's banks, most of which were foreign owned. 
In addition, liberal offshore banking rules (for transactions among 
nonresidents) were introduced in 1989. 

Although Lacalle supported the idea of Uruguay as an interna- 
tional banking center, he indicated in early 1990 that his adminis- 
tration planned to introduce legislation under which bank secrecy 
i.e., anonymous accounts, would be lifted in cases where illegal 
drug-money laundering was suspected. The government was pres- 
sured to change that aspect of its banking regulations after an al- 
leged Colombian "drug lord" told United States officials that he 
and others often used Uruguayan accounts. 

Transportation and Communications 

Uruguay's small size and relatively flat terrain have made de- 
velopment of an excellent transportation network easy. By most 
accounts, the country had one of the best domestic highway and 
rail systems in Latin America. The country's location in the 
Southern Hemisphere, far from many of its trading partners, 
however, and its lack of land links with neighboring countries have 
been a hindrance in the past to foreign trade and transportation. 
New technologies, including the introduction of refrigerated ships 
early in the twentieth century and later the airplane, have improved 
access to distant markets. Moreover, since the 1970s the country 
has made a concerted effort to upgrade links with neighbors, im- 
proving road connections to Brazil and constructing highway and 
later railroad bridges across the Rio Uruguay to Argentina. 

The highway network radiated out from Montevideo and in 1989 
consisted of about 50,000 kilometers of roads, including 6,500 
kilometers of the national network that received improvements dur- 
ing the 1985-89 period. Rural areas were served by a secondary 
network of 3,000 kilometers of gravel roads and 40,200 kilometers 
of dirt roads. Road transport carried an estimated 87 percent of 
all freight, and a modern bus system provided passenger links be- 
tween most of the populated areas. Bridges at Fray Bentos and Pay- 
sandu spanned the Rio Uruguay and provided for easy road transit 
to Argentina, and by the late 1980s newly paved roads to the north- 
ern border tied into the Brazilian road network (see fig. 8). In 1989 
Uruguay was granted loans of US$84 million from the Inter- 
American Development Bank and US$81 million from the World 



136 




Tacuarembo 



Paysandu 



T,mbaCse del 



Mercedes 




yi Paso de 
los Toros 



Durazno 



Trinidad 



Martin 




Canelones 



Buenos 
Aires 




Florida 



^ mode 

la 'Plata Piriapoho 

Montevideo 9 J< , ^ v 

>y Laguna del 

ARGENTINA \ 

\ Boundary represe 



Figure 8. Transportation System, 1990 
138 



— International boundary 
National capital 
Populated place 

-+ Railroad 
Road 

— Pan American Highway 
Major airport 

Major port 

20 40 Kilometers 



20 40 Miles 
'Claimed by Argentina and Uruguay 




Maldonada 

Punta del 
Este 



Palorna 



ntation not necessarily authoritative 



The Economy 



Bank (see Glossary) to modernize its international highways and 
to begin construction of Route 1 , linking Montevideo with Bue- 
nos Aires. 

Owing to the high cost of automobile ownership in Uruguay, 
traffic congestion in Montevideo remained low by the standards 
of other cities in the world. There was no subway system in 1990, 
but an extensive bus network operated on a twenty-four-hour ba- 
sis. The city's electric trolleys had been allowed to decay, and the 
number of routes had been repeatedly reduced. 

In 1989 the government-owned AFE maintained 3,000 kilome- 
ters of standard- gauge railroads. Montevideo was the center of the 
system with lines extending out to the north, northwest, and east. 
Three connections with the Brazilian rail system and a new link 
with Argentina that opened in 1982 allowed for easier shipment 
of goods to these countries. The rail authority, however, found it 
increasingly difficult to maintain passenger trains in the face of a 
decade of declining ridership. In 1988 all passenger service was 
discontinued under the government's five-year rationalization pro- 
gram designed to downsize the stagnant railroad subsector. 

Carrasco International Airport, located twenty-one kilometers 
from Montevideo, was the country's principal airport. Capitan 
Curbelo Airport, near Punta del Este, also handled international 
flights to Brazil and Argentina. Fourteen other primarily commer- 
cial airports with paved runways were distributed throughout Uru- 
guay. Uruguayan National Airlines (Primeras Lineas Uruguayas 
de Navegacion Aerea — PLUNA) operated fourteen aircraft to 
domestic destinations and neighboring countries. Three Boeing 737s 
and one Boeing 707 were the workhorses of PLUNA' s regional 
service. Uruguayan Military Air Transport (Transportes Aereos 
Militares Uruguayos — TAMU), a small airline owned by the Uru- 
guayan Air Force, maintained commercial flights on several domes- 
tic and foreign routes. 

Despite improvements in land and air transportation since the 
1960s, most foreign trade still went by water. Montevideo was the 
country's principal port, handling close to 60 percent of all cargo 
in the early 1980s. Other major ports included Colonia and Punta 
del Este on the Rio de la Plata Estuary and Fray Bentos, Paysan- 
du, and Salto on the Rio Uruguay. Passenger ferries linked Mon- 
tevideo and Buenos Aires with six-hour-long crossings via Colonia, 
and a modern high-speed hydrofoil traveled from Colonia to Bue- 
nos Aires in three and one-half hours. 

River transport remained an important means of transportation, 
carrying about 5 percent of all freight, and the country counted 
over 1,600 kilometers of navigable inland waterways. The Rio 



139 



BRAZIL 



International boundary 
National capital 
• Populated place 
1 Railroad 
Road 

Pan American Highway 

■T- Major airport 
J, Major port 

20 40 Kilometers 
20 40 Mil 
'Claimed by Argentina and Uruguay 



BRAZIL 




\ Colonia 

Buenos^^^ [ a Tiara 
Aires 




Montevideo ^J^ 



Piriapolis^-,^^- 

Loguna del Punta del 
Sauce Este 



La Paloma 



OCESl9i 

Boundary representation not necessarily authoritative 



Figure 8. Transportation System, 1990 
138 



Uruguay: A Country Study 



Uruguay was by far the most important waterway, and ocean- 
going ships of up to 4.2 meters draught could travel north as far 
as Paysandu. Smaller vessels of up to 2.7 meters draught could 
travel upstream to Salto. 

Broadcast facilities were numerous, and all parts of the country 
could receive at least one AM radio station or one television sta- 
tion. In 1990 there were ninety-nine AM stations, a quarter of which 
were in the Montevideo area. Ten of the AM stations broadcast 
on shortwave frequencies to reach a larger audience both domesti- 
cally and abroad. All stations, except for one government-owned 
transmitter, were commercial, and broadcasts were in Spanish. 
Montevideo had four television stations; another twenty-two were 
scattered in towns across the country. Uruguayans had an estimated 
1.8 million radio receivers and 650,000 television sets in 1990. 

Improvement of the nation's telephone system was a priority for 
the Sanguinetti government. By 1990 there were over 345,000 tele- 
phones (at least 1 1 percent of the population, the highest per capi- 
ta in South America), an increase of over 25 percent from five years 
earlier. The US$13 million expansion of service, about half of which 
took place in the country's interior, helped reduce the number of 
households and businesses on a waiting list for telephone service. 
The government's monopolistic communications agency, ANTEL, 
planned to invest US$100 million in the telephone system between 
1989 and 1993, extending service to another 180,000 households 
in the country's interior. The basic elements of the nation's telecom- 
munications network were expanded, and the system was modern- 
ized. In 1990 the government heeded the growing Latin American 
trend toward privatization of state enterprises when it began al- 
lowing private investment in the nation's telephone system. After 
years of depending on Argentine relay stations for its internation- 
al telephone service, Uruguay installed its first satellite earth sta- 
tion in 1985. In 1990 it had two International Telecommunications 
Satellite Organization (Intelsat) earth stations. Telex and facsimile 
(fax) services were also expanded. 

Tourism 

Tourism in Uruguay generated an estimated US$300 million 
in 1989, equivalent to 22 percent of merchandise exports. The 
tourist industry depended mainly on visitors from Argentina. Thus, 
not only were tourist receipts seasonal (peaking in the warm sum- 
mer months, January through March), they also fluctuated along 
with economic conditions in Argentina and relative exchange rates. 
In 1989 about 85 percent of the 1 million tourists were from Ar- 
gentina; an additional 10 percent were from Brazil, and smaller 



140 



Artigas Boulevard, 
a highway leading 
to downtown Montevideo 
Courtesy Inter-American 
Development Bank 




percentages came from Paraguay and Chile. Many of the visitors 
from Argentina owned property in Uruguay, especially in the resort 
area of Punta del Este, which drew half of all summer tourists. 

In 1986 the Sanguinetti government created the Ministry of 
Tourism to regulate hotel and resort prices and to promote Uru- 
guayan tourist attractions at international exhibitions. The minis- 
try also developed programs aimed at attracting visitors and 
conventions to Uruguay during the low season, but with limited 
success. At the same time, the government supported the improve- 
ment of hotels, marinas, and camping facilities. To protect the 
beaches, a key tourist attraction, the Montevideo sewage system 
was being upgraded in 1 990 so that it would discharge more than 
two kilometers offshore. Despite such efforts, tourism was expect- 
ed to remain mostly regional because of the long distance from Eu- 
rope and the United States, lack of services (Uruguay had no 
five- star hotels), lack of promotion, and restrictive transportation 
policies (for example, charter flights were difficult to get). 

External Sector 

Two concerns dominated Uruguay's foreign economic relations 
during the 1980s. The first, both a fiscal and an external problem, 
was the foreign debt. Uruguay's external debt of about US$6.7 
billion (US$6.2 of this was foreign debt to the United States) in 
1989 (US$4.2 billion belonging to the public sector) was not an 



141 



Uruguay: A Country Study 



issue affecting international financial markets, like the much larg- 
er debt burdens of Brazil or Mexico (each over US$100 billion). 
Even so, Uruguay's indebtedness was onerous in comparison with 
the size of its economy and was one of the highest per capita debts 
in the region. For both the Sanguinetti and the Lacalle govern- 
ments, debt reduction and debt rescheduling were priorities. 

The second major concern was trade, primarily for its impor- 
tance to overall economic growth. Trade-related activities were 
responsible for about 12 percent of GDP in 1988. Exports, which 
were the source of Uruguay's wealth in the early twentieth centu- 
ry, were seen as the key to the revival of the economy. Demand 
within Uruguay was simply too small to support large production 
increases. Trade was especially important in the 1980s because of 
the debt burden. In order to make payments on mostly dollar- 
denominated loans, Uruguay needed foreign exchange (dollars). 
Thus, the trade balance (the difference in value between exports 
and imports) took on added significance. To spur economic growth 
and to earn foreign exchange, Uruguay joined other Latin Ameri- 
can nations in restraining imports and augmenting exports. Despite 
its positive trade balance, however, Uruguay's foreign debt con- 
tinued to increase. 

Foreign Debt 

Uruguay began borrowing abroad on a large scale in the 1970s 
after the price of oil (its largest import) quadrupled. The oil price 
increase that prompted many developing nations to begin borrowing 
also made it easier for them to borrow; commercial banks were 
flush with petrodollars (foreign exchange obtained by petroleum- 
exporting countries through sales abroad) and were eager to make 
loans. Uruguay's debt increased from US$500 million in 1976 to 
as much as US$5.9 billion by the end of 1987. Although this debt 
was already large in proportion to Uruguay's GDP, international 
financial conditions made the loans appear beneficial for both the 
creditors (commercial banks and international organizations) and 
the Uruguayan government. 

The most significant positive trend, from the point of view of 
both parties, was the decline in the late 1970s of the dollar's value, 
relative to major currencies. This decline meant that dollar prices 
of most internationally traded goods were rising, a fact that had 
double significance. First, Uruguayan exporters (like exporters in 
many other developing countries) were earning more dollars for 
a given basket of goods, making the country appear capable of 
repaying a large debt. Second, real interest rates (the nominal in- 
terest rate minus inflation) were negative. That is, the rate at which 



142 



The Economy 



the dollar value of Uruguay's exports was rising (about 30 percent 
per year in 1979) was higher than the nominal United States in- 
terest rate (11 percent per year in 1979). Thus, it was becoming 
easier for Uruguay to service its external debt. Under these condi- 
tions, the government was inclined to continue borrowing abroad 
to finance its deficit and to fund development projects. 

The situation changed dramatically in the 1980s for several rea- 
sons. First, the dollar appreciated significantly. This reversed the 
process that had occurred in the 1970s; the dollar price of Uru- 
guay's exports fell. Second, the United States tightened its money 
supply. This prompted banks to raise interest rates on both old 
and new loans (the adjustable interest rate had become common 
in the 1970s). Both of these developments raised the real interest 
rate on Uruguay's debt. As the dollar appreciated, the peso 
declined, making the dollar value of Uruguay's GDP smaller and 
the ratio of debt to GDP larger (with both debt and GDP denomi- 
nated in dollars). At the same time, lower export earnings made 
it more difficult for Uruguay to service its external debt. New loans 
were needed just so that the country could service old debt, even 
though foreign borrowing had become far less attractive than in 
the 1970s. In 1985 the total debt burden stood at US$4.9 billion; 
debt service (interest payments alone) consumed 34 percent of the 
nation's export income. 

The debt crisis overshadowed all other economic difficulties in 
Uruguay during the late 1980s. The crisis was a vicious circle. Pay- 
ing off the debt required higher growth and higher income. But 
the mere act of paying debt service on the huge amounts of prin- 
cipal reduced essential investment spending and precluded sustained 
economic growth. While the debt continued to grow, finding the 
means of servicing the debt became an economic priority; Uru- 
guay was one of the few Latin American countries that did not 
default on its debt. While debt service became difficult, new ex- 
ternal loans were no longer available (except to help service old 
debt) because Latin American debtors were no longer considered 
creditworthy. Thus, the government had to resort to inflationary 
means ("printing money") to finance its public-sector deficit domes- 
tically. This directly contradicted the government's primary goal 
of eliminating inflation. 

The Sanguinetti administration's debt policy focused on the most 
immediate difficulty for Uruguay: large debt- service payments. 
Through negotiations with its creditors, including the International 
Monetary Fund (IMF — see Glossary), the government was able 
to gain some breathing space. The debt-service burden declined 
to an estimated US$449 million in 1989 (28 percent of export 



143 



Uruguay: A Country Study 



earnings) from US$613 million in 1988 (44 percent of export earn- 
ings). However, the fact that debt was merely being rescheduled 
meant that the overall debt burden did not decrease. New financ- 
ing actually added to the debt, which increased to US$6.7 billion 
by the end of 1989. Several projects to reduce the debt principal 
were carried out under the debt-for-equity program, but they were 
small compared with the total debt. During the 1988-89 period, 
the Central Bank approved fourteen investment projects that 
reduced the debt by an estimated US$78 million. 

Substantive efforts to decrease a portion of the debt burden — 
the US$1.7 billion owed to commercial banks — began in March 
1989 in the context of the United States government's Brady Plan. 
In an important departure from earlier United States policy, the 
Brady Plan (named after Secretary of the Treasury Nicolas Brady) 
officially recognized the need for debt reduction. Minister of Econ- 
omy and Finance Ricardo Zerbino and Central Bank president 
Ricardo Pascale began debt negotiations with international credi- 
tors in September 1989. 

The Brady Plan offered commercial banks holding Uruguayan 
debt three options. (The same three options applied in the case of 
other Latin American nations, with minor variations in the percen- 
tage terms of each option.) First, the banks could increase their cur- 
rent loans by 20 percent over four years, offering Uruguay new 
money in exchange for strengthened guarantees of repayment. Sec- 
ond, banks could exchange their debt for guaranteed bonds (backed 
by United States Treasury bonds) paying a fixed 6.34 percent in- 
terest. Finally, banks could opt to allow Uruguay to repurchase its 
debt for 56 percent of the debt's face value. In a tentative agree- 
ment reached in 1990, banks holding 28 percent of the debt chose 
the new money, banks with 33 percent of the debt chose to convert 
to fixed- interest bonds, and those holding the remaining 39 percent 
chose to allow Uruguay to repurchase its debt. The agreement was 
significant even though it affected only about one-fourth of Uru- 
guay's debt. As the Economist reported, "Once a country has reached 
a Brady-plan deal, it is on the road to financial respectability." 

Trade 

Uruguay expanded its involvement in international trade con- 
siderably during the latter part of the 1980s. Exports doubled (in 
nominal dollar terms) from US$854 million in 1985 to US$1 .6 bil- 
lion in 1989. Imports increased at a slower rate, from US$675 mil- 
lion in 1985 to US$1.1 billion in 1989. The merchandise balance 
of trade reached a positive US$463 million in 1989, helping to off- 
set the demands of debt service. 



144 



The Economy 



The largest export markets were Brazil (US$443 million in 1989), 
the European Community (US$363 million), the United States 
(US$177 million), and Argentina (US$78 million). Brazil (US$369 
million), Argentina (US$177 million), and the United States 
(US$109 million) were the leading sources of imports in 1988. Uru- 
guay's largest exports continued to be its so-called traditional 
products: wool (US$288 million in 1989), meat (US$225 million), 
and hides (US$129 million). While much attention continued to 
be focused on these three largest exports, a variety of nontradi- 
tional exports took on growing importance during the late 1980s. 
Goods such as processed foods, grains, fishery products, chemi- 
cals, and finished leather apparel together accounted for 60 per- 
cent of Uruguay's exports by the end of the decade. 

Uruguay's largest import was crude oil. Imports of oil declined 
during much of the 1980s as Uruguay increased its reliance on 
hydroelectric power. Reduced oil prices in the late 1980s, combined 
with the reduction in the quantity of imports, helped improve the 
nation's overall trade balance. The value of oil imports declined 
from US$433 million in 1982 (40 percent of imports) to about 
US$120 million in 1988 (about 10 percent of imports). In 1989 
the trend toward lower oil imports was reversed when the severe 
drought compromised Uruguay's capacity to generate hydroelec- 
tric power; oil imports increased to US$139 million. As a nation 
with no domestic sources of petroleum, Uruguay was particularly 
hard-hit by the oil price rise that accompanied the Persian Gulf 
crisis in late 1990. Domestic fuel prices were raised by over 50 per- 
cent during September and October 1990. 

Several categories of industrial imports increased as Uruguay's 
manufacturing sector recovered from the recession. The largest in- 
creases were among semi-industrialized products, such as chemi- 
cals, rubber, and plastics, which increased from US$300 million 
in 1982 to US$500 million in 1987. Imports of capital goods 
(machinery and transportation equipment) dipped in the mid-1980s 
but recovered to US$150 million in 1987, indicating that manufac- 
turing activity could increase. In 1989, however, imports of capi- 
tal goods fell by 14 percent to US$137 million. 

Balance of Payments 

Uruguay's trade balance was positive and steadily improving 
during most of the 1980s. However, the current account balance 
remained negative until the mid-1980s because of the burden of 
debt service (see table 16, Appendix). In 1986, 1988, and 1989, 
the trade balance was large enough to make the current account 
balance positive. An exception to this pattern was 1987 because 



145 



Uruguay: A Country Study 

imports surged as the economy recovered from the recession. The 
capital account balance was positive for most of the 1980s because 
Uruguay continued to borrow from abroad to help cover its debt- 
service payments and because foreigners continued to deposit money 
in Uruguayan banks. Uruguay's reserves decreased during most 
years, but as of 1988 the nation still had substantial gold reserves — 
more than 80 tons. During the 1989 presidential campaign, at least 
one candidate proposed selling the gold reserves to pay off the for- 
eign debt. Lacalle opposed such a plan, however. 

Economic Integration 

Economic integration with other Latin American nations was 
an important goal for Uruguay because of its small internal mar- 
ket. The idea of integration was enshrined in the nation's consti- 
tution, which states that "the Republic will seek to achieve social 
and economic integration of the Latin American nations, especially 
to provide for a common defense of products and raw materials." 

Sanguinetti played an important mediating role in the early dis- 
cussions of integration between Argentina and Brazil, a delicate 
process because of the traditional rivalry between the two larger 
nations (see Foreign Relations under Democratic Rule, 1985-90, 
ch. 4). Presidents Raul Alfonsm of Argentina, Jose Sarney Costa 
of Brazil, and Sanguinetti held five trilateral meetings between 1986 
and 1988, during which they signed several tariff-reduction agree- 
ments and discussed a long-term framework for regional econom- 
ic integration. 

The Uruguayan government predicted that the lower trade bar- 
riers would allow Uruguayan exports to Brazil and Argentina to 
increase by 80 to 90 percent by 1991. In practice, however, Uru- 
guay's trade with its larger neighbors seemed to be affected more 
by exchange rates than by tariff and quota agreements. For exam- 
ple, Uruguay already had bilateral trade agreements with both 
Brazil and Argentina during the late 1980s, but in early 1990 ex- 
ports to Argentina covered by the agreement actually declined. In 
contrast, exports to Brazil increased markedly during the first half 
of 1990 after the Brazilian government tightened liquidity and 
caused the Brazilian cruzeiro to appreciate. 

Despite such early evidence that the trade agreements were hav- 
ing only a limited effect on regional commerce, Lacalle indicated 
in early 1990 that he expected Uruguay to continue to play a pivotal 
role in regional integration. He indicated further that he hoped 
the integration would be extended to include Paraguay and Bolivia. 
"We will try to open the Atlantic balcony to [those] inland coun- 
tries," he said, "improving the operation of our ports, promoting 



146 



The Economy 



the use of the Parana-Paraguay waterway, and establishing free- 
trade zones near the ports for the manufacture of products from 
the South American 'hinterland'. " Lacalle also said he proposed 
to President Andres Rodriguez Pedotti of Paraguay the formation 
of a trinational fleet of merchant vessels to carry Uruguayan, 
Paraguayan, and Bolivian products to markets in North America, 
Europe, and Asia. 

Thus, Lacalle envisioned Uruguay not only as a participant in 
trade agreements with its larger neighbors but also as a close part- 
ner with the smaller and apparently more stable economies of the 
region. A noteworthy aspect of Lacalle 's plan was its stress on the 
development of the regional infrastructure. Lack of such an 
infrastructure — there was no railroad bridge between Uruguay and 
Argentina, for example, until the Salto Grande Dam opened in 
1982 — remained a serious impediment to regional integration. 

Free-Trade Zones 

The free-trade zones that Lacalle mentioned were already oper- 
ating in Uruguay during the late 1980s as an important part of 
the Sanguinetti administration's strategy to encourage both for- 
eign investment and regional trade. Under legislation passed in 
late 1987, free- trade zones such as the ones in Colonia and Nueva 
Palmira (in Colonia Department) became attractive sites for in- 
vestors for several reasons: users were exempted from all Uruguayan 
taxes, except for social security taxes on Uruguayan workers; all 
imported goods and services entering the zones were exempt from 
customs duties or taxes; goods and services reexported from the 
zones were exempt from taxes; and commercial or government ser- 
vice monopolies were not applicable within the zones, so that no 
company was forced to deal with the State Insurance Bank, for 
example. Restrictions on free-trade zones prohibited companies 
from duplicating existing industries, such as textile manufactur- 
ing. Thus, the thrust of the program was to attract innovative com- 
panies to Uruguay. As of early 1990, the free-trade zones were 
attracting a good deal of attention, but it was too soon to tell what 
impact they would have on the Uruguayan economy. 

* * * 

A superb and very readable introduction to Latin American eco- 
nomic history, with references to Uruguay, is Celso Furtado's Eco- 
nomic Development of Latin America, which focuses on major themes 
such as import-substitution industrialization. For a more detailed 
picture of Uruguay's economic history until the 1970s, the best 



147 



Uruguay: A Country Study 

English-language source is M.H J. Finch's A Political Economy of 
Uruguay since 1870. Few English-language books have focused ex- 
clusively on Uruguay's more recent economic progress. A good 
source in Spanish is La Crisis uruguaya y el problema nacional by the 
Centro de Investigaciones Economicas. 

Several references examine individual aspects of Uruguay's econ- 
omy. Two good articles on the labor movement are Arturo S. Bron- 
stein's "The Evolution of Labour Relations in Uruguay" and Juan 
Rial Roade's "Uruguay." Larry A. Sjaastad's "Debt, Depres- 
sion, and Real Rates of Interest in Latin America" explains Uru- 
guay's early involvement in the debt crisis. 

Basic economic data on Uruguay are provided in the Interna- 
tional Monetary Fund's International Financial Statistics, in the Inter- 
American Development Bank's Economic and Social Progress in Latin 
America, published annually, and in the Latin American Regional 
Reports series of periodicals. Two useful Uruguayan economic peri- 
odicals are Guia financiera and Busqueda. (For further information 
and complete citations, see Bibliography.) 



148 



Chapter 4. Government and Politics 



The Legislative Palace 



ON MARCH 1, 1990, Uruguayans and representatives of many 
foreign governments witnessed the reaffirmation of Uruguay's 
revived democratic tradition: the transfer of power from one elected 
president to another. Having completed a full five-year term in 
office, Julio Maria Sanguinetti Cairolo (1985-90) of the liberal 
Colorado Party (Partido Colorado) transferred the presidential sash 
to Luis Alberto Lacalle de Herrera of the rival conservative Na- 
tional Party (Partido Nacional, usually referred to as the Blancos). 
Lacalle was elected to serve for the 1990-95 period as the coun- 
try's fiftieth president. 

An urbane lawyer, rancher, and senator, Lacalle was only the 
third National Party candidate ever to be elected president. After 
only five years as a National Party leader, he achieved what his 
legendary grandfather, Luis Alberto de Herrera, the National 
Party's dominant caudillo during the first half of the twentieth cen- 
tury, attained after a half-century of political battles: the defeat 
of the Colorados and the ascension of the Blancos to power. Tech- 
nically, Lacalle became the first National Party president because 
Uruguay was formally ruled by a nine-member collegial executive 
(colegiado) when his party won its previous victories. 

Uruguayan democracy had been reinstated five years earlier — 
after the 1973-85 period of military rule — as a result of Sanguinetti' s 
victory in the November 25, 1984, election and referendum. Those 
national polls were held in accordance with the Naval Club Pact 
of 1984, a political agreement between the armed forces and four 
political parties: the Colorado Party, the National Party, the Broad 
Front (Frente Amplio, a leftist alliance), and the Civic Union 
(Union Civica — UC) (see The Military Government, 1973-85, ch. 
1). The military regime, however, blocked the proposed presiden- 
tial candidacies of the National Party's Wilson Ferreira Aldunate 
and the Broad Front's Liber Seregni Mosquera. Running, in ef- 
fect, unopposed, Sanguinetti won approximately 41 percent of the 
votes, followed by the National Party's 34 percent, the Broad 
Front's 21 percent, and the UC's 2.5 percent. 

Sanguinetti was the first Uruguayan president to be elected, al- 
beit in a semidemocratic election, after the period of repressive mili- 
tary rule. He had been a lawyer, journalist, representative, minister 
of education and culture, and minister of labor and social welfare. 
During his term of office, Sanguinetti consolidated Uruguay's 
multiparty democracy, restored the country's prestige and respect 



151 



Uruguay: A Country Study 

abroad, increased its export markets, and avoided financial dis- 
order. He symbolized Uruguay's political opening by visiting the 
Soviet Union and China in 1989. 

In what proved to be its most active electoral year, Uruguay held 
two national elections in 1989. The first was a referendum on the 
government's amnesty law for abuses committed by the military 
regime. The second, the November 26 poll — the first totally free 
presidential elections to be held in Uruguay since 1971 — demon- 
strated the country's return to its democratic tradition of free and 
honest elections. 

Although voting was compulsory in Uruguay, the turnout in the 
November 26, 1989, elections was nonetheless impressive: 88 per- 
cent of the electorate of 2.3 million people participated. The high 
turnout did not necessarily mean that Uruguayan voters were 
among the most politically sophisticated in the world, although Uru- 
guayans usually discussed and debated political issues exhaustively 
at all levels of society. The high voter turnout in 1989 demonstrated, 
however — as it had in 1984 when 88.5 percent participated — that 
Uruguay was a very politicized country and that it had one of Lat- 
in America's longest democratic traditions. 

Despite Sanguinetti's accomplishments, his party's historic and 
decisive defeat reflected widespread dissatisfaction with two years 
of economic stagnation. The elections also challenged Uruguay's 
traditional two-party system of the Colorado and National parties. 
For the first time, a third party, the Broad Front, reached impor- 
tant levels by winning the country's second most powerful post (after 
president of the republic): the mayorship of Montevideo, which 
had over 40 percent of the country's population and more than 
two-thirds of its economic activity. The new Marxist mayor, Ta- 
bare Vazquez, immediately began pressing Lacalle for greater 
municipal autonomy (see Democratic Consolidation, 1985-90, this 
ch.). The prospects for the success of a "co-habitation arrange- 
ment," i.e., harmonious cooperation, however, were doubtful be- 
cause Uruguayans continued to support a strong presidential system 
and because Lacalle was assertive of his executive powers. Thus, 
in addition to the challenges posed by a resurgent political left, labor 
unrest, and economic crisis, the Lacalle government faced the pos- 
sibility of political clashes with the municipal government. 

Constitutional Background 

Since achieving independence in 1828, Uruguay has promul- 
gated five constitutions: in 1830, 1917, 1934, 1952, and 1967. When 
it became independent on August 27, 1828, the Oriental Republic 



152 



Welcome banner in Montevideo 's Independence Plaza in honor of the 
1983 state visit by King Juan Carlos I and Queen Sofia of Spain 

Courtesy Charles Guy Gillespie 

of Uruguay (Republica Oriental del Uruguay) drew up its first con- 
stitution, which was promulgated on July 18, 1830. 

The 1830 constitution has been regarded as Uruguay's most tech- 
nically perfect charter. Heavily influenced by the thinking of the 
French and American revolutions, it divided the government among 
the executive, legislative, and judicial powers and established Uru- 
guay as a unitary republic with a centralized form of government. 
The bicameral General Assembly (Asamblea General) was em- 
powered to elect a president with considerable powers to head the 
executive branch for a four-year term. The president was given 
control over all of his ministers of government and was empowered 
to make decisions with the agreement of at least one of the three 
ministers recognized by the 1830 constitution. 

Like all of Uruguay's charters since then, the 1830 constitution 
provided for a General Assembly composed of a Chamber of 
Senators (Camara de Senadores), or Senate (Senado), elected 
nationally, and a Chamber of Representatives (Camara de Repre- 
sentantes), elected from the departments. Members of the Gen- 
eral Assembly were empowered to pass laws but lacked the authority 
to dismiss the president or his ministers or to issue votes of no 
confidence. An 1834 amendment, however, provided for juicio 



153 



Uruguay: A Country Study 

politico (impeachment) of the ministers for "unacceptable con- 
duct." 

As established by the 1830 constitution, the Supreme Court of 
Justice (Corte Suprema de Justicia), and lesser courts, exercised 
the judicial power. The General Assembly appointed the members 
of the high court. The latter — with the consent of the Senate in 
the case of the appellate courts — appointed the members of the lesser 
courts. The constitution also divided the country into departments, 
each headed by a governor appointed by the president and each 
having an advisory body called a Neighbors' Council (Consejo de 
Vecinos). 

Although the 1830 constitution remained in effect for eighty-seven 
years, de facto governments violated it repeatedly. In the 1878-90 
period, the Blancos and Colorados initiated the framework for a 
more stable system through understandings called "pacts between 
the parties." This governing principle, called coparticipation (copar- 
ticipacidn) , meaning the sharing of formal political and informal 
bureaucratic power, has been formally practiced since 1872. 

In 1913 President Jose Batlle y Ordonez (1903-07, 1911-15), 
the father of modern Uruguay, proposed a constitutional reform 
involving the creation of a Swiss- style collegial executive system 
to be called the colegiado. A strong opponent of the one-person, 
powerful presidency, Batlle y Ordonez believed that a collective 
executive power would neutralize the dictatorial intentions of po- 
litical leaders. It met intense opposition, however, not only from 
the Blancos but also from members of his own Colorado Party. 
The proposal was defeated in 1916, but Batlle y Ordonez worked 
out a deal with a faction of the Blancos whereby a compromise sys- 
tem was provided for in the second constitution, which was ap- 
proved by plebiscite on November 25, 1917. 

In addition to separating church and state, the new charter, which 
did not become effective until 1919, introduced substantial changes 
in the powers of the presidency. The executive power consisted of 
the president, who controlled foreign relations, national security, 
and agriculture, and the National Council of Administration (Con- 
sejo Nacional de Administracion), or colegiado, which administered 
all other executive governmental functions (industrial relations, 
health, public works, industry and labor, livestock and agriculture, 
education, and the preparation of the budget). The colegiado, em- 
bodying the political mechanism of coparticipation, consisted of 
nine members: six from the majority party and three from the 
minority party. The first colegiado (1919-33) was thereby established 
without eliminating the office of president. 



154 



Government and Politics 



The history of successive constitutions is one of a lengthy strug- 
gle between advocates of the collegial system and those of the 
presidential system. Although the 1917 constitution worked well 
during the prosperous time after World War I, recurring conflicts 
between the president and the colegiado members made the execu- 
tive power ineffective in coping with the economic and social crises 
wracking the country. These conflicts eventually led to the presiden- 
tial coup of 1933. The ad hoc government suspended the constitu- 
tion and appointed a constituent assembly to draw up a new one. 

The 1934 constitution abolished the colegiado and transferred its 
power to the president. Nevertheless, presidential powers remained 
somewhat limited. The executive power once again was exercised 
by a president who had to make decisions together with the 
ministers. The 1934 charter established the Council of Ministers 
(Consejo de Ministros) as the body in which these decisions were 
to be made. This council consisted of the president and the cabi- 
net ministers. The constitution required the chief executive to ap- 
point three of the nine cabinet ministers from among the members 
of the political party that received the second largest number of 
votes in the presidential election. The General Assembly, for its 
part, could issue votes of no confidence in cabinet ministers, with 
the approval of two-thirds of its members. 

The constitution divided the Senate between the Blancos and 
the Colorados or, as political scientist Martin Weinstein has pointed 
out, between the Herrerist faction of the Blancos (named after Luis 
Alberto de Herrera) and the Terrist wing of the Colorados (named 
after Gabriel Terra; president, 1931-38). The party that garnered 
the second largest number of votes automatically received 50 per- 
cent of the Senate seats. In addition, the 1934 charter empowered 
the Supreme Court of Justice to rule on the constitutionality of the 
laws. This system, which lasted eighteen years, further limited the 
power of the president and his government. 

Although Uruguay returned to a more democratic system in 
1942, the failure of political sectors to reach an agreement on the 
proposed constitution drafted that year resulted in the postpone- 
ment of constitutional reform. On July 31, 1951, a formal pact 
between the rightist Batllist faction of the Colorados — the Colorado 
and Batllist Union (Union Colorada y Batllista — UCB) — and the 
Herrerist Movement (Movimiento Herrerista) of the Blancos called 
for a plebiscite on constitutional reform. The plebiscite the following 
December 16 drew less than half of the 1.1 million voters to the 
polls, but the collegial system was approved by a small margin. 

As the culmination of an effort to reestablish the colegiado and 
the plural executive power, a fourth constitution was promulgated 



155 



Uruguay: A Country Study 



on January 25, 1952. It readopted Batlle y Ordonez's original 
proposal for coparticipation by creating a nine-member colegiado, 
this time called the National Council of Government (Consejo Na- 
cional de Gobierno), with six majority-party seats and three 
minority-party seats. The presidency of the council rotated among 
the six members of the majority party. The chief executive could 
nominate only four of the nine ministers from his own party fac- 
tion; the General Assembly selected the other five through separate 
votes in both chambers. An absolute majority (more than two- 
thirds), however, of the full membership of the two legislative cham- 
bers had to support the appointments. It thereby ensured that either 
the Colorados or the Blancos would get the minority seats on the 
colegiado. The 1952 constitution also provided for impeachment of 
the president by the General Assembly. 

This nine-member colegiado, which headed the executive branch 
from 1954 to 1967, was ineffective because the president lacked 
control over the ministers and because the majority was seldom 
united. During most of this period, the National Party held pow- 
er, having been elected in 1958 for the first time in over ninety 
years and again in 1962 when a different faction of the party was 
elected. The ineffectiveness of these governments caused the pub- 
lic to turn against the colegiado arrangement. 

In the elections of November 27, 1966, nearly 59 percent of Uru- 
guayans voted to amend the 1952 constitution and to reestablish 
a presidential system of government, thus ending a fifteen-year ex- 
periment with the colegiado. The new constitution, which became 
operative on February 15, 1967, and has remained in effect since 
then, created a strong one-person presidency, subject to legisla- 
tive and judicial checks. In free and fair elections held in 1968, 
Uruguayans approved the new charter and elected the Colorado 
Party to power again. 

The 1967 constitution contains many of the provisions of the 
1952 charter. However, it removed some of the General Assem- 
bly's power to initiate legislation and provided for automatic ap- 
proval of bills under certain conditions if the legislature failed to 
act. If, on receiving a bill, the president has objections or com- 
ments to make, the bill must be returned to the General Assembly 
within ten days. If sixty days elapse without a decision by the Gener- 
al Assembly, the president's objections must be considered as ac- 
cepted. The 1967 document also established the Permanent 
Commission, composed of four senators and seven representatives, 
which exercises certain legislative functions while the General As- 
sembly is in recess. 



156 



Government and Politics 



The 1967 charter can be amended by any of four different 
methods. First, 10 percent of the citizens who are registered to vote 
can initiate an amendment if they present a detailed proposal to 
the president of the General Assembly. Second, two-fifths of the 
full membership of the General Assembly can approve a proposal 
presented to the president of the General Assembly and submitted 
to a plebiscite at the next election (a yes vote of an absolute majority 
of the full membership of the General Assembly is required, and 
this majority must represent at least 35 percent of all registered 
voters). Third, senators, representatives, and the president of 
the republic can present proposed amendments, which must be 
approved by an absolute majority of the full membership of the Gen- 
eral Assembly. And finally, amendments can be made by con- 
stitutional laws requiring the approval of two-thirds of the full 
membership of each chamber of the General Assembly in the same 
legislative period. 

In 1976, however, the military government issued a series of con- 
stitutional decrees that amended the 1967 constitution by creating 
the Council of the Nation (Consejo de la Nacion) to serve as the 
supreme governmental body, with executive and legislative func- 
tions. It consisted of the thirty members of the Council of State 
(Consejo de Estado, the body created by the regime in June 1973 
to act in lieu of the General Assembly, which dissolved by the re- 
gime) and the twenty-eight senior officers of the armed forces (six- 
teen from the army, six from the navy, and six from the air force). 
The Council of the Nation appointed the president of the republic 
and the members of the Council of State, the Supreme Court of 
Justice, and the Tribunal of Administrative Claims, which had been 
dissolved in 1985. Eight institutional acts substituted for many of 
the functional provisions and guarantees of the 1967 constitution. 
For example, in addition to giving the Council of the Nation the 
power to appoint the president of the republic and to set general 
policy for the country, institutional acts deprived previous office- 
holders and candidates of their political rights and permitted the 
arbitrary dismissal of public employees. 

Under the 1976 constitutional amendments, the president exer- 
cised executive power, acting with the concurrence of one or more 
ministers as appropriate or with the National Security Council (Con- 
sejo de Seguridad Nacional — Cosena). The Cosena had been formed 
in 1973 and consisted of the commanders of the army, navy, and 
air force, plus an additional senior military officer, and the ministers 
of national defense, interior, and foreign affairs. It participated in 
any decision related to the "national security" or in any formula- 
tion of overall plans or objectives. 



157 



Uruguay: A Country Study 

The constitutional decrees declared generally that the main- 
tenance of the national security was of ''exclusive competence," 
i.e., the sole prerogative, of the armed forces. These decrees 
deprived local governments of all budgetary powers. The Council 
of State continued to pass laws that the executive normally would 
have submitted for approval. Only the executive could initiate the 
procedure for approval of legislation on budgetary or other mat- 
ters that could be related in any way to national security. The 
decrees also created the Ministry of Justice, responsible for rela- 
tions between the executive and judicial powers. 

In 1980 the military regime drew up a charter that would have 
provided for a strong, continuing role for the military along the 
lines of the 1976 constitutional decrees, including legitimizing the 
Cosena's new role. The document also would have greatly reduced 
the roles of the General Assembly and political parties. In a pleb- 
iscite held November 30, 1980, however, Uruguayans, by a mar- 
gin of 57 percent to 43 percent of the popular vote, rejected the 
new military-drafted constitution. Nevertheless, a new thirty-five- 
member Council of State was installed on August 20, 1981, be- 
fore President Gregorio Alvarez Armelino (1981-85) took office. 
Its powers were expanded to include responsibility for calling a con- 
stitutional assembly, a plebiscite, and general elections. 

In discussions held during 1983, the military commanders and 
the leaders of the Colorado and National parties prepared a new 
text of the 1967 constitution. Accords negotiated by the military, 
the Colorados (but not the Blancos), and most of the Broad Front 
in July and August 1984 provided for a return to democracy without 
the Cosena. 

Following the return to civilian rule in 1985, Uruguay's human 
rights record quickly improved. One of the Sanguinetti govern- 
ment's first acts in this area was — with the approval of the newly 
restored General Assembly — to grant amnesty to all political 
prisoners, who consisted chiefly of members of the National Liber- 
ation Movement-Tupamaros (Movimiento de Liberation Nacional- 
Tupamaros — MLN-T). In the late 1980s, there were no credible 
reports of human rights violations, according to the United States 
Department of State. 

Since 1985 Uruguay's democratic governments have respected 
the sixty-five articles in the 1967 constitution concerned primarily 
with the rights of citizens. The document provides for freedom of 
religion, thought, speech and press, peaceful assembly and associ- 
ation, collective bargaining, movement within the country, foreign 
travel, emigration and repatriation, respect for political rights, and 
the inviolability of property and privacy. The constitution does 



158 



Government and Politics 



not provide for a state religion, although Roman Catholicism 
predominates, or for capital punishment (that was abolished dur- 
ing BatUe y Ordonez's second term). There are two forms of citizen- 
ship: natural (persons born in Uruguay or those who were of 
Uruguayan parents and were registered residents) and legal (in- 
dividuals established in Uruguay with at least three years' residence 
in the case of those with family in Uruguay or five years' residence 
for those without family there). Primary and secondary education 
is both free and compulsory. Every citizen eighteen years of age 
or older has the right and obligation to vote, which is compulsory 
(see The Electoral Process, this ch.). 

Uruguay has long been one of the most egalitarian countries in 
the world. Women's suffrage was enacted in 1932. In 1946 a sta- 
tute was passed repealing all laws that established legal differences 
in the rights of women. Uruguayan women, who constituted one- 
third of the work force in the 1980s, enjoyed complete equality under 
the law. Nevertheless, some barriers still existed in practice because 
of traditional social patterns and restricted employment opportu- 
nities. Women often received less pay than men, especially in less 
skilled jobs. By early 1990, very few women held high political po- 
sitions, but women had served in the cabinet, the Supreme Court 
of Justice, and the diplomatic corps, including at the ambassadorial 
level, and a few had served as alternates in the General Assembly. 

Governmental Structure 

Uruguay is a republic with three separate branches of govern- 
ment (see fig. 9). The 1967 constitution institutionalizes a strong 
presidency, subject to legislative and judicial checks. The electorate 
exercises sovereignty directly through elections, initiatives, or 
referendums and indirectly through representative powers estab- 
lished by the constitution. 

The Executive 

Executive power is exercised by the president of the republic, 
acting with the advice of the Council of Ministers. The vice presi- 
dent of the republic serves as the president of the General Assem- 
bly and the Senate. The president and vice president are elected 
for five-year terms by a simple majority of the people through a 
unique voting system. Candidates must be at least thirty- five years 
of age, native born, and in full possession of their civil rights. After 
a period following their election, the president and vice president 
are sworn in before both chambers of the General Assembly and 
take office on March 1 . Neither may be reelected until five years 
after the completion of their terms. 



159 



Uruguay: A Country Study 




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160 



Government and Politics 



The president's duties include publishing ail laws and enforc- 
ing them, informing the General Assembly of the state of the repub- 
lic and of proposed improvements and reforms, making objections 
to or observations on bills sent by the General Assembly, propos- 
ing bills to the chambers or amendments to laws previously enact- 
ed, conferring civilian and military offices, and removing civil 
servants (with the consent of the Senate) for "inefficiency, derelic- 
tion of duty, or malfeasance. " The key civilian appointments made 
by the president are cabinet members. 

A 1986 constitutional amendment returned to the presidency the 
power to command the armed forces and appoint the armed forces 
commander. The chief executive grants promotions to members 
of the armed forces, with the consent of the Senate for promotions 
to colonel or higher ranks. The president also is responsible for 
maintaining internal order and external security. Although the con- 
stitution does not give the president sweeping powers in cases of 
emergency, Article 168 empowers the chief executive "to take 
prompt measures of security in grave and unforeseen cases of for- 
eign attack or internal disorder." In such an event, the president 
is required to explain his action to a joint session of the General 
Assembly or, if it is in recess, to the Permanent Commission 
within twenty-four hours. 

Other presidential powers include decreeing the severance of 
diplomatic relations with another country and declaring war if ar- 
bitration or other pacific means to avoid it are unsuccessful. The 
president appoints ambassadors and other foreign service diplo- 
matic personnel. The chief executive may not leave the country 
for more than forty-eight hours without authorization from the 
Senate. The president may not be impeached unless found guilty 
of violations of articles of the constitution or other serious offenses. 

The Council of Ministers includes the cabinet ministers (appoint- 
ed by the president) and the president of the Central Bank of Uru- 
guay. Each appointee must be approved by a simple majority in 
each chamber of the General Assembly. Cabinet members must 
be native-born citizens in full possession of their civil rights and 
at least thirty years of age. They may be removed from office by 
impeachment proceedings initiated by the Chamber of Represen- 
tatives and approved by the Senate. 

When all the cabinet ministers or their deputies meet and act 
jointly, the body is known as the Council of Ministers. Presided 
over by the president of the republic, who has a vote, the Council 
of Ministers is responsible for all acts of government and adminis- 
tration. In addition, a number of autonomous entities (autonomous 
agencies or state enterprises; see Glossary) and decentralized services 



161 



Uruguay: A Country Study 



are important in government administration (see Public Adminis- 
tration, this ch.). 

The principal duties of the cabinet members are to enforce the 
constitution, laws, decrees, and resolutions; to formulate and sub- 
mit for the consideration of superior authority any laws, decrees, 
and resolutions they deem appropriate; to effect — within the limits 
of their functions — the payment of the national debt; to propose 
the appointment or discharge of employees of their ministries; and 
to perform any other functions entrusted to them by laws or by 
measures adopted by the executive power. They may attend the 
sessions of either chamber of the General Assembly and their respec- 
tive standing committees, and they may take part in debate, but 
they may not vote. 

The Legislature 

The bicameral General Assembly enacts laws and regulates the 
administration of justice. The General Assembly consists of the 
thirty-member Senate — thirty senators and the vice president of 
the republic, who presides over it as well as the General Assembly 
and has both a voice and a vote in Senate deliberations — and the 
ninety-nine-member Chamber of Representatives. If the vice presi- 
dent ever assumes the presidency, the senator heading the list of 
the party that received the most votes in the last election will suc- 
ceed to the presidency of the Senate. 

Members of both legislative bodies are directly elected every five 
years by a system of proportional representation. The Chamber 
of Representatives represents the nineteen administrative subdi- 
visions of the country, with each department (departamento) having 
at least two representatives. The members of the Senate are also 
elected by the people, but with the entire nation representing a single 
electoral district. Members of the General Assembly must be natural 
citizens or legal citizens with seven years' exercise of their rights. 
Senators must be at least thirty years of age, and representatives 
at least twenty-five years of age. Uruguay does not have a residency 
requirement for election to the Senate or the Chamber of Represen- 
tatives. Consequently, almost all of the country's politicians have 
lived and worked in Montevideo. Military and civil service per- 
sonnel or public officials may not be candidates for either cham- 
ber of the General Assembly unless they resign their positions at 
least three months before the election. In 1988 there were no fe- 
male members of the General Assembly, but several served as al- 
ternates. 

The Chamber of Representatives can impeach any member of 
either chamber, the president, the vice president, cabinet ministers, 



162 



President Lacalle 
Courtesy Embassy of Uruguay, Washington 



163 



Uruguay: A Country Study 

judges of the Supreme Court of Justice, and other judges. The 
Senate is responsible for trying these impeachment cases and can 
deprive a person of a post by a two-thirds vote of its membership. 
In addition, the Senate, in session from mid-March to mid- 
December, spends much time considering nominations for, appoint- 
ments to, and removals from office submitted by the executive. 
In other respects, the Senate and the Chamber of Representatives 
have equal powers and duties. Members of either of the two cham- 
bers can initiate a bill. Both chambers must approve a proposed 
bill before it can be sent to the executive power to be published. 
The latter branch, however, has ten days to make objections to 
or observations on the bill. If the president objects to only part of 
a bill, the General Assembly can enact the other part. 

Among the most important duties of the Chamber of Represen- 
tatives — in joint session with the Senate — are the election of the 
members of the Supreme Court of Justice and three quasi-judicial 
autonomous entities: the Accounts Tribunal, the Contentious- 
Administrative Tribunal, and the Electoral Court. These ordinary 
administrative courts hear cases involving the functioning of state 
administration. In addition, the Chamber of Representatives is 
empowered to grant pardons and settle disputes concerning leg- 
islation on which the two chambers disagree. The Chamber of 
Representatives also has the exclusive right to impeach members 
of both chambers, the president and vice president of the repub- 
lic, the cabinet ministers, and members of the courts for violations 
of the constitution or other serious offenses. Impeachment proceed- 
ings must be tried before the Senate. 

The Accounts Tribunal, which is a functionally autonomous 
appendage of the General Assembly, is responsible for determin- 
ing taxes and reporting on the accounts and budgets of all the state 
organs. It is authorized to intervene in all matters relating to the 
financial activities of the state organs, departmental governments, 
and autonomous agencies, and it is authorized to report to the 
appropriate authority all irregularities in the management of pub- 
lic funds or infractions of budgetary and accounting laws. It is au- 
thorized to certify the legality of expenditures and payments and 
append pertinent objections whenever necessary. In the depart- 
mental governments and autonomous agencies, officials acting 
under the supervision of the tribunal perform the same duties. The 
tribunal's opinions cover all the organs of the state, including 
departmental governments. An annual report must be submit- 
ted to the General Assembly. The Accounts Tribunal consists of 
seven members appointed by a two-thirds vote of the full mem- 
bership of the General Assembly. Their elective qualifications are 



164 



Government and Politics 



the same as those of a senator. Their term of office ends when the 
succeeding General Assembly makes new appointments, but they 
may be reelected. 

The Contentious- Administrative Tribunal hears pleas for the nul- 
lification of final administrative acts that are considered contrary 
to law or an abuse of authority made by the administration, state 
organs, departmental governments, autonomous entities, and de- 
centralized services. It also has jurisdiction over the final adminis- 
trative acts of the governments of the departments and of the 
autonomous entities. Its functions are only to appraise the act it- 
self and to confirm or annul it, without alteration. Its decisions 
have effect only in the cases before it. The Contentious- Adminis- 
trative Tribunal can act in cases of conflict of jurisdiction based 
on legislation and on differences that arise among the executive, 
the departmental governments, and the autonomous entities. 

The qualifications necessary for election to the Contentious- 
Administrative Tribunal, the manner of appointment, the remu- 
neration, and the term of office are the same as those established 
for the members of the Supreme Court of Justice. The tribunal 
is composed of five judges appointed by the General Assembly for 
ten-year terms. It also has an ' 'attorney general for administra- 
tive claims" (appointed by the president), whose qualifications, 
remuneration, and term of office are decided by the tribunal. The 
attorney general is heard at the final hearing of all matters 
within the jurisdiction of the tribunal. 

The Electoral Court, a quasi-judicial autonomous entity, super- 
vises national, departmental, and municipal elections and has com- 
petence over all electoral acts and procedures. It rules in the last 
instance on appeals and complaints; it also judges the election of 
all the elective posts and the holding of a plebiscite (on constitu- 
tional issues) or referendum (on political issues). Of the Electoral 
Court's nine members, the General Assembly appoints five and 
their alternates by a two-thirds vote in joint session and elects the 
other four members and their alternates equally from the two 
political parties having the highest number of votes. The court has 
eighteen alternates in addition to the nine full members. Mem- 
bers serve four years until the succeeding legislature selects their 
replacements (see The Electoral Process, this ch.). 

The judiciary 

Like all previous charters, the 1967 constitution establishes the 
judicial branch as an independent power of the state. The Supreme 
Court of Justice heads the judiciary, both civilian and military. 
Lower civilian courts include six appellate courts (for civil matters, 



165 



Uruguay: A Country Study 

criminal matters, and labor matters), courts of first instance (some- 
times referred to as lawyer courts \juzgados letrados]), and justice 
of the peace courts. 

During the military regime (1973-85), the Ministry of Justice 
administered the courts, and military officers were appointed to 
the highest courts. As a result of the 1984 Naval Club Pact, which 
clipped the powers of the military courts, the judicial branch 
regained its autonomy when Sanguinetti assumed office on March 
1, 1985. That May the General Assembly, despite the opposition 
of the Colorado Party, declared all posts of the Supreme Court of 
Justice vacant on the grounds that none of the justices had been 
legally appointed. Accordingly, all of the military officers appointed 
by the military regime to the high court or the appellate courts re- 
tired from their positions. Sanguinetti then formally abolished the 
Ministry of Justice, retaining only the minister of justice post. 
Nevertheless, there was a continuing public debate during his ad- 
ministration over the need to reform the legal and judicial systems. 

Located in Montevideo, the Supreme Court of Justice manages 
the entire judicial system. It prepares budgets for the judiciary and 
submits them to the General Assembly for approval, proposes all 
legislation regarding the functioning of the courts, appoints judges 
to the appellate courts, and nominates all other judges and judi- 
cial officials. It has the power to modify any decisions made by 
the appellate courts and is the only court allowed to declare the 
unconstitutionality of laws passed by the General Assembly. It alone 
decides on conflicts affecting diplomats and international treaties, 
the execution of the rulings of foreign courts, and relations among 
agencies of the government. The president of the Supreme Court 
of Justice is empowered to attend meetings of the committees of 
both chambers of the General Assembly and has a voice in discus- 
sion but has no vote. 

A conference of the two chambers of the General Assembly ap- 
points the five members of the Supreme Court of Justice. The 
justices must be between forty and seventy years of age, native- 
born citizens in full possession of their civil rights, or legal citizens 
with ten years' exercise of their rights and twenty-five years of resi- 
dence in the country. They also must have been a lawyer for ten 
years or must have been a judge or member of the Public Minis- 
try for eight years. (The Public Ministry consists of the public at- 
torneys, headed by the "attorney general of the court and attorney 
of the country, ' ' who acts independently before the Supreme Court 
of Justice.) Members serve for ten years and may be reelected 
after a break of five years. At the appointment of the president, 
two military justices serve on the Supreme Court of Justice on 



166 



18th of July Avenue in downtown Montevideo 
Courtesy Inter-American Development Bank 

an ad hoc basis and participate only in cases involving the mili- 
tary (see Military Justice, ch. 5). 

Each of the appellate courts, also located in Montevideo, has 
three judges appointed by the Supreme Court of Justice with the 
consent of the Senate. To be a member, one must be at least thirty- 
five years of age, a native-born citizen or legal citizen for seven 
years, and a lawyer with at least eight years of experience or other- 
wise engaged in a law-related profession for at least six years. An 
appellate court judge is obliged to retire by age seventy. These courts 
do not have original jurisdiction but hear appeals from lower courts. 
The appellate courts divide responsibilities for civil matters (in- 
cluding matters concerning commerce, customs, and minors), as 
well as for criminal and labor affairs. 

In Montevideo Department, the judges of first instance, some- 
times referred to as lawyer judges (jueces letrados), decide on the ap- 
peals to lower-court rulings. In 1990 Montevideo Department had 
forty judges of first instance, including eighteen who decided on 
civil matters, four on minors, three on customs, ten on criminal 
cases, and five on labor cases. 

Outside Montevideo Department, the first decision on all cases 
of civil, family, customs, criminal, or labor law is submitted to the 
municipal judges of first instance. Each department has up to 



167 



Uruguay: A Country Study 



five municipal judges of first instance, located in the major cities. 
They rule on most minor cases, with the exception of those that 
are within the competence of the justices of the peace. Both muni- 
cipal judges of first instance and the Montevideo Department judges 
of first instance must have previously served as justices of the peace. 

At the lowest level, each of the country's 224 judicial divisions 
has a justice of the peace court. The Supreme Court of Justice 
appoints the 224 justices of the peace for four-year terms. They 
must be at least twenty-five years of age, native-born citizens or 
legal citizens for two years, and in full possession of their civil rights. 
Those who serve in Montevideo Department and the capitals and 
major cities of other departments must be lawyers; those in rural 
areas must be either lawyers or notaries. Their jurisdiction is limited 
to cases involving eviction, breach of contract, collection of rent, 
and all small-claims commercial and business cases. 

The law recognizes only one category of lawyer. In order to prac- 
tice law, an individual must first obtain the degree of law and so- 
cial sciences from the Faculty of Law and Social Sciences of the 
University of the Republic (also known as the University of Mon- 
tevideo). The degree is granted by the university after the success- 
ful completion of six years of studies. Candidates must be at least 
twenty-one years of age, listed in the Register of Lawyers main- 
tained by the Supreme Court of Justice, not be under indictment 
for a crime penalized by corporal punishment, and not have been 
convicted of a crime. A public defender system was established in 
1980 with the placing of lawyers in all courts to assist those unable 
to pay for their services. Public defenders — appointed jointly by 
the president and the minister of justice — protect the society's in- 
terests. 

Public Administration 

Uruguay traditionally has had a sizable civil service organization. 
Civil service regulations determine conditions for admission to the 
service as a career. In accordance with these regulations for service 
in the national government, departmental governments adopted 
regulations for their own civil service personnel. Permanent career 
status is achieved after a fairly short probationary period. 

The Sanguinetti government reestablished the National Office of 
the Civil Service (Oficina Nacional del Servicio Civil — ONSC), 
which the military regime had abolished, as the technical advisory 
organ specializing in administrative reform matters. The ONSC pub- 
licizes its ideas on change and reform by sponsoring academic, public, 
and international seminars and roundtables. 



168 



Government and Politics 



The ONSC's duties include controlling the entrance of person- 
nel into the public administration and streamlining public institu- 
tions. Under Sanguinetti, the ONSC also implemented course 
requirements for civil service managers and, with the assistance 
of France's National School of Public Administration (Ecole Na- 
tionale d' Administration Publique), created a "training course for 
high executives of the central administration." During the first 
twenty years since its creation in 1969, the ONSC trained or pro- 
vided technical assistance to some 4,000 public employees, more 
than one-third of them between 1986 and 1988. 

Following ONSC guidelines, the Sanguinetti government re- 
structured the civil service and reassigned 1,787 workers. At the 
end of 1988, the state employed a total of 271,124 workers (ap- 
proximately 20 percent of the labor force), who included 1,281 
members of the legislative branch, 106,455 members of the execu- 
tive branch, 5,132 members of the judicial branch, 117,423 mem- 
bers of the autonomous entities, and 40,833 members of the 
departmental governments. 

Over twenty autonomous entities administer certain national in- 
dustrial and commercial services (see table 14, Appendix). These 
agencies are divided into two general classifications: the first is con- 
cerned with education, welfare, and culture; the second, with in- 
dustry and commerce. 

Local Government 

Uruguay's administrative subdivisions consist of nineteen depart- 
ments (departamentos) , which are subordinate to the central govern- 
ment and responsible for local administration. They enforce national 
laws and administer the nation's social and educational policies and 
institutions within their departments. These departments have limit- 
ed taxing powers, but they can borrow funds and acquire property. 
They also have the power to establish unpaid five-member local 
boards or town councils in municipalities other than the depart- 
mental capital if the population is large enough to warrant such 
a body. 

Executive authority is vested in a governor (intendente) , who 
administers the department, and in a thirty-one-member depart- 
mental board (junta departmental), which carries out legislative func- 
tions. These functions include approval of the departmental budget 
and judicial actions, such as impeachment proceedings against 
departmental officials, including the governor. At the municipal 
level, a mayor (intendente municipal) assumes executive and admin- 
istrative duties, carrying out resolutions made by the local board 
(whose members are appointed on the basis of proportional 



169 



Uruguay: A Country Study 



representation of the political parties). The governor is required 
to comply with and enforce the constitution and the laws and to 
promulgate the decrees enacted by the departmental board. The 
governor is authorized to prepare the budget, submit it for ap- 
proval to the departmental board, appoint the board's employees, 
and, if necessary, discipline or suspend them. The governor repre- 
sents the department in its relations with the national government 
and other departmental governments and in the negotiation of con- 
tracts with public or private agencies. 

Like the governor, the members of the departmental board and 
the mayor are elected for five-year terms in direct, popular elec- 
tions. A governor can be reelected only once, and candidates for 
the post must meet the same requirements as those for a senator, 
in addition to being a native of the department or a resident there- 
in for at least three years before assuming office. Departmental 
board members must be at least twenty-three years of age, native 
born (or a legal citizen for at least three years), and a native of 
the department (or a resident for at least three years). 

The board sits in the capital city of each department and exer- 
cises jurisdiction throughout the entire territory of the department. 
It can issue decrees and resolutions that it deems necessary either 
on the suggestion of the governor or on its own initiative. It can 
approve budgets, fix the amount of taxes, request the interven- 
tion of the Accounts Tribunal for advice concerning departmental 
finances or administration, and remove from office — at the request 
of the governor — members of nonelective local departmental boards. 
The board also supervises local public services; public health; and 
primary, secondary, preparatory, industrial, and artistic educa- 
tion. Although Montevideo is the smallest department in terms of 
area (divided into twenty-three geographic zones that generally coin- 
cide with the electoral zones), its departmental board had sixty- 
five members in 1990; all other departments had thirty-one-member 
boards and a five-member executive council appointed by the 
departmental board, with proportional representation from the prin- 
cipal political parties. 

The Electoral Process 

Uruguayans take voting very seriously. Voting, which is obliga- 
tory, is not restricted by race, sex, religion, or economic 
status. Other rules governing suffrage include mandatory inscrip- 
tion in the Civil Register and a system of proportional represen- 
tation. These rules also include prohibition of political activity (with 
the exception of voting) by judicial magistrates, directors of the 
autonomous entities, and members of the armed forces and police. 



170 



Government and Politics 



In addition, the president of the republic and members of the Elec- 
toral Court are not permitted to serve as political party officials 
or engage in political election propaganda; all electoral boards must 
be elected; a two- thirds vote of the full membership of each cham- 
ber is needed to adopt any new law concerning the Civil Register 
or elections; and all national and local elections are to be held 
every five years on the last Sunday in November. 

Uruguay's electoral processes are among the most complicated 
known. The unusual Uruguayan electoral system combines 
primaries and a general election in one event. Primary and gener- 
al elections combine proportional representation with a "double 
simultaneous vote" (doble voto simultdneo). This system, as estab- 
lished by the Elections Law of 1925, allows each party's sub-lemas, 
or factions, to run rival lists of candidates. 

Traditionally, under Uruguayan law the results of political elec- 
tions are tabulated in an unusual fashion. Under the 1982 Politi- 
cal Parties Law, each party is allowed to present three tickets, or 
single candidates, each representing a different sub-lema, for ex- 
ecutive and legislative posts, and these factions do not need the 
party's approval of their candidates. A voter selects a faction and 
a list of candidates within that sub-lema. The votes of all the factions 
are given to the party (lemd) to which they belong, and the pres- 
idency goes to the candidate of the sub-lema that receives the most 
votes within the winning party. Thus, even if a given ticket gar- 
ners more votes than any other slate running for election, it can- 
not win unless its party also wins. The governing party is actually 
the majority group within the party that won the last elections. The 
disadvantages of this system are that it discourages intraparty selec- 
tivity in choosing presidential candidates, often allows politicians 
who receive only a minority of the vote to rise to power, blocks 
the rise of new parties and new leadership while encouraging frac- 
tionalization, and often results in a multiplicity of alliances or com- 
binations of national and local candidates for office. 

Election of members of the General Assembly is even more 
complicated. Election of the ninety-nine members of the Cham- 
ber of Representatives is based on the population in the coun- 
try's nineteen departments, whereas the thirty members of the 
Senate are elected at large from the nation. Seats are allocated 
on the basis of each party's share of the total vote, but each party 
usually has various lists of candidates, among whom prior agree- 
ments have been made to unify or transfer votes. As a result, there 
have been frequent complaints that voters never know for whom 
they are ultimately voting in the congressional races. Electoral 



171 



Uruguay: A Country Study 

fraud, however, is precluded by the traditional method of decen- 
tralized vote-counting at thousands of vote-counting tables. 

In addition, the Electoral Court supervises the entire registra- 
tion and voting process, registers parties and candidates, has final 
jurisdiction in all election disputes, and supervises the functioning 
of the various departmental electoral boards. It also supervises the 
National Electoral Office in Montevideo, which has the responsi- 
bility for organizing and maintaining the Civil Register of all eligible 
voters in the country. One Electoral Court exists at the national 
level and one in each department capital. 

Before an election, the General Assembly allocates a sum of 
money for the Electoral Court to distribute among the political par- 
ties in proportion to the number of votes a party received in the 
last election. These funds help to defray campaign costs. Party- 
proposed ballots must be presented to the Electoral Court at least 
twenty days prior to an election. After making the final verifica- 
tion of ballots, the Electoral Court can annul an election, but only 
if gross irregularities are found. 

Political Dynamics 

Political Parties 

The Colorado and National parties and, to a lesser extent, the 
Broad Front coalition, were the three major political entities in 1990. 
Until the 1971 elections, the Colorado and National parties together 
accounted for 90 percent of the votes cast; the remaining 10 per- 
cent of the votes were divided among various small parties. Some 
of the minor parties have followed the lead of the major parties 
and sought to enhance their electoral chances through coalitions, 
such as the Broad Front. The traditional two-party system was 
threatened for the first time by the Broad Front's victory in the 
Montevideo municipal elections in 1989, its first win on the na- 
tional level. 

As previously noted, a system of coparticipation (coparticipaciori) 
in the government between the ruling party and the principal op- 
position has characterized Uruguayan politics since 1872. According 
to Weinstein, this term best described Uruguay's unique political 
process and was still widely used among Uruguayans in the 1980s. 
Coparticipation meant that the two traditional parties and their 
members were entitled to divide and share the governing of the 
country. Indeed, in order to govern, the majority party had to make 
alliances with other parties because being the majority party in a 
proportional representation system did not necessarily mean that 



172 



Government and Politics 



it had a simple majority in the General Assembly. For example, 
the Colorado Party almost always governed in alliance with a sec- 
tion of the National Party. During the first years of the Sanguinetti 
administration, the National Party refrained from systematic op- 
position, thereby helping to ease the legislative passage of govern- 
ment policies. The Colorado Party was expected to do the same 
for the Lacalle government. Sharing political power also has been 
determined by the principle of parity (paridad), meaning that the 
losing party's participation in the government was based on the 
relative electoral strength of the two parties. 

Each party permitted internal ideological divisions because each 
party could run multiple presidential candidates and its own slate 
of legislative nominees. Factions, or sub-lemas, fielded different lists 
of candidates for general elections. Voters expressed a preference 
for a list rather than an individual candidate, and they voted for 
a party. The winning list of the party that received the most votes 
won the presidency and a percentage of the seats in the Senate and 
the Chamber of Representatives corresponding to the percentage 
of votes that the party as a whole received. National and depart- 
mental elections were held simultaneously every five years. Cam- 
paigns were funded in part by government subsidies given to the 
parties and factions in accordance with their voting strength in the 
previous election. 

Traditional Parties 

Uruguay is one of the few Latin American countries with two 
political groupings — the Colorado and National parties — as old as 
the country itself. Most Uruguayans consider themselves either 
Colorados or Blancos from birth, and affiliation with one of the 
two major parties or their major sub-lemas is a part of one's fam- 
ily heritage. The two parties traditionally maintained a rough 
equilibrium, and their factions had their own leaders, candidates, 
followers, policies, and organizational structures. These sub-lemas 
embraced persons of various political orientations and social back- 
grounds. In general, however, the Colorado Party traditionally was 
associated with the city, labor unions, and secularist and "progres- 
sive" movements, whereas the National Party identified with the 
interior farming groups and the more religious and conservative 
groups. 

The cleavage between Montevideo and the rural interior in- 
fluenced party affiliation and political attitudes to a greater extent 
than did differences in social status and income. (The coastal region 
often held the balance of power between Montevideo and the in- 
terior.) Although three-fourths of all voters remained loyal to the 



173 



Uruguay: A Country Study 

traditional parties in the 1984 elections, the support of these par- 
ties in Montevideo weakened gradually during the 1980s. The 
decline of the National Party in Montevideo was the most pro- 
nounced; it won none of the capital's twenty- three electoral zones 
in 1984 and made no headway against the Broad Front in 1989. 

Despite internal fractionalization, both traditional parties main- 
tained the structures typical of more cohesive modern parties, in- 
cluding conventions, general assemblies, party steering committees, 
and caucuses. The fundamental units of the factions of both par- 
ties were the neighborhood clubs, guided and controlled by profes- 
sional politicians. 

Vague ideological differences between the major parties still ex- 
isted in the 1980s, but the differences involved not so much polit- 
ics as allegiance to certain leaders and traditions. Although the 
Colorados traditionally were more liberal than the Blancos, both 
parties had liberal and conservative factions. In the General Assem- 
bly, the left wings of both parties often lined up in opposition to 
both right wings on important votes. The Colorados also were more 
anticlerical in the early twentieth century, but this distinction lost 
most of its significance as both parties broadened their bases of sup- 
port. The urban-based Colorados were considered more cosmo- 
politan in outlook than the rural-based, tradition-oriented, and 
economically conservative Blancos. In general, the followers of 
Batlle y Ordonez in the Colorado Party were more willing than 
the Blanco leadership to undertake political, social, and economic 
innovations. 

The Colorado and National parties each had various sub-lemas 
in late 1990. The Colorado Party's factions included the right-of- 
center United Batllism (Batllismo Unido — BU), which was in the 
majority for thirty years until August 1990; the left-of-center BU 
sector, called the Social Action Movement (Movimiento de Ac- 
cion Social — MAS), led by Hugo Fernandez Faingold; Unity and 
Reform (Unidad y Reforma), or List 15, led by Jorge Batlle Ibafiez; 
the antimilitary Freedom and Change (Libertad y Cambio), or List 
85, led by Enrique E. Tarigo, Sanguinetti's vice president; the In- 
dependent Batllist Faction (Corriente Batllista Independiente — 
CBI), led by Senator Manuel Flores Silva; Victor Vaillant's 
"progressive" Batllist Reaffirmation Movement (Movimiento de 
Reafirmacion Batllista — MRB), a CBI splinter group; the rightist 
Colorado and Batllist Union (Union Colorada y Batllista — UCB), 
or List 123; and Democratic Traditionalism (Tradicionalismo 
Democratico— Trademo), a sector of the National Republican As- 
sociation (Asociacion Nacional Republicana — ANR). 



174 



Government and Politics 



The UCB was subdivided into three main groups: the minority 
right-wing and promilitary Pachequist faction led by Jorge Pacheco 
Areco (president, 1967-72); the sector led by Pablo Millor Coc- 
caro, Pacheco 's principal rival; and the National Integrationist 
Movement (Movimiento Integracionista Nacional — MIN), which 
was formed in early 1986 and led by Senator Pedro W. Cersosimo. 
Following the 1989 elections, Millor' s sector caused a political storm 
within the UCB when it announced that it would henceforth operate 
autonomously, although still recognizing Pacheco 's leadership. 
Pacheco 's faction, for its part, founded the National Colorado Move- 
ment (Movimiento Nacional Colorado — MNC) on May 11, 1990. 

As a result of the primaries of the Colorado Party in early Au- 
gust 1990, Batlle Ibanez's Unity and Reform sub-lema ousted the 
faction led by former President Sanguinetti from the leadership 
of the Colorado Party. Batlle Ibanez's faction obtained five seats 
on the party's fifteen-member National Executive Committee, fol- 
lowed by Pacheco 's four seats, Sanguinetti' s three, and Millor' s 
three. 

The National Party was divided into at least five factions. The 
Herrerist Movement (Movimiento Herrerista), or faction, of the 
National Party emerged in the 1930s. Lacalle founded the Her- 
rerist National Council (Consejo Nacional Herrerista — CNH) in 
1961 . The CNH joined with Senator Dando Ortiz's sector in 1987 
to form the right-of-center Herrerist Movement. After Wilson Fe- 
rreira Aldunate's death in March 1988, Lacalle assumed the 
presidency of the Herrerist Movement. 

Other National Party factions included Carlos Julio Pereyra's 
left-of-center La Rocha National Movement (Movimiento Nacional 
de La Rocha — MNR), the second largest National Party sub-lema; 
the centrist For the Fatherland (Por la Patria — PLP), founded in 
1969 by Ferreira as a personalist movement, reorganized into a 
more democratic party in 1985, and led by Senator Alberto Saenz 
de Zumaran after Ferreira' s death in 1988; Renovation and Victory 
(Renovacion y Victoria — RV), led by Gonzalo Aguirre Ramirez, 
a constitutional lawyer; and the People's Blanco Union (Union 
Blanca Popular — UBP), founded in the late 1980s by Oscar Lopez 
Balestra, a member of the Chamber of Representatives. The CNH, 
MNR, and PLP were all antimilitary factions. 

Additional minor parties included the White Emblem (Divisa 
Blanca), a conservative party led by Eduardo Pons Etcheverry; Juan 
Pivel Devoto's Nationalist Popular Faction (Corriente Popular 
Nacionalista — CPN), which broke away from the National Party 
in late 1986; the Barran National Party (Partido Nacional-Barran); 
the ultrarightist Society for the Defense of Family Tradition and 



175 



Uruguay: A Country Study 

Property (Sociedad de Defensa de la Tradicion Familia y Proprie- 
dad — TFP); the Humanist Party (Partido Humanista), which ap- 
peared in 1985; and the Animal Welfare Ecological Green Party 
(Eto-Ecologista— Partido Verde— EE-PV), which emerged in 1989. 

Broad Front 

In February 1971, Colorado Party dissident senators Zelmar 
Michelini (who was assassinated in 1976) and Hugo Batalla formed 
the left-of-center Broad Front (Frente Amplio) coalition in a bid 
to break the historical two-party system of Colorados and Blan- 
cos. The Socialist Party of Uruguay (Partido Socialista del Uru- 
guay — PSU), one of Uruguay's oldest left-wing parties (founded 
in 1910 by Emilio Frugoni), was one of its principal members. 

Another core Broad Front member, founded in 1921, was the 
Communist Party of Uruguay (Partido Comunista del Uruguay — 
PCU). Rodney Arismendi, PCU general secretary since 1955, 
returned to Uruguay in November 1984 after many years as a resi- 
dent of Moscow; he died in 1988 and was replaced by Jaime Pe- 
rez, a former union leader. One of Sanguinetti's first acts after 
taking office was to lift the restrictions on the PCU (which had been 
banned) and its Moscow-line newspaper El Popular. The PCU had 
only an estimated 7,500 members in early 1990, but its apparatus 
controlled the majority of the country's labor unions. 

The Broad Front had a strong following in Montevideo, with 
a presence in all social classes and all generations. Under military 
rule (1973-85), the alliance's leader, General (Retired) Liber 
Seregni Mosquera, was arrested, the Broad Front was outlawed, 
and its activists were persecuted. When national elections were held 
in 1984, the military banned Seregni from running. Nevertheless, 
with Juan Jose Crottogini as its candidate, the Broad Front received 
slightly more than 21 percent of the total vote, compared with 18.5 
percent in the 1971 national elections. 

The Broad Front coalition generally agreed with the Sanguinetti 
government's foreign policy and political leadership stances, but 
it was fundamentally opposed to its economic policies. For exam- 
ple, the Broad Front favored increasing real incomes and opposed 
the government's export-oriented policy. 

Internal power struggles between moderate and radical sectors 
weakened the Broad Front in the late 1980s. By late 1987, the Chris- 
tian Democratic Party (Partido Democrata Cristiano — PDC) and 
the People's Government Party (Partido por el Gobierno del 
Pueblo — PGP) were feuding with other coalition members over their 
demand that the alliance be redefined to give their own positions 
greater weight. The PDC and PGP wanted to reduce the hegemony 



176 



Government and Politics 



of the Marxist groups and their undue influence on Seregni's public 
stances. In 1988 a PDC faction broke away and sought an under- 
standing with one of the factions of the National Party. The PDC 
and PGP then proposed that the alliance should field two presiden- 
tial candidates in the November 1989 elections: Seregni and PGP 
leader Batalla. The Broad Front's radical Marxist and communist 
sector, however, opposed the idea of running two candidates be- 
cause they regarded the front as a party and not a coalition. In 
December 1988, therefore, the leftist parties of the alliance decid- 
ed that Seregni would be the Broad Front's sole candidate; but the 
PGP backed Batalla. The PDC and PGP withdrew from the alli- 
ance in February and March 1989, respectively, over the issue of 
presidential candidacies and the leftist control of the organization. 
Batalla' s PGP, which accounted for about 40 percent of the alli- 
ance's electoral votes in 1984, had been responsible for eleven of 
the Broad Front's twenty-one representatives and three of its six 
senators. 

By May 1989, the Broad Front consisted of fourteen parties. 
Smaller ones included the People's Victory Party (Partido por la 
Victoria del Pueblo — PVP) and the Uruguayan Revolutionary 
Movement of Independents (Movimiento de Independientes 
Revolucionario Oriental — MRO), a pro-Cuban group founded in 
1961. Five parties were accepted as members in May 1989: the 
National Liberation Movement-Tupamaros (Movimiento de Libe- 
ration Nacional-Tupamaros — MLN-T), the 26th of March Move- 
ment of Independents (Movimiento de Independientes 26 de 
Marzo — 26 M), the Trotskyite Socialist Workers' Party (Partido 
Socialista de los Trabajadores — PST), the Grito de Asencio Integra- 
tion Movement (Movimiento de Integration Grito de Asencio), 
and a faction of the PDC. 

The MLN-T — a former urban guerrilla organization established 
in 1962 and disbanded by the armed forces in 1972 — was given 
amnesty by the General Assembly in March 1985. The MLN-T 
reorganized and appeared in the political arena in July 1986 but 
was not legally recognized until May 1989. With several hundred 
members, it was politically insignificant. In order to run candi- 
dates in the November 1989 elections, the MLN-T, together with 
other ultra-leftist forces— the PVP, PST, and MRO— created the 
People's Participation Movement (Movimiento de Participation 
Popular— MPP). 

In 1989 the Broad Front also included a subcoalition called the 
Advanced Democracy Party (Partido de Democracia Avanzada), 
which served as a front for the PCU; the People's Broad Front 
Movement (Movimiento Popular Frenteamplista — MPF); the 



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Uruguay: A Country Study 

Broad Front Unity Faction (Corriente de Unidad Frenteamplista — 
CUFO); the Pregon Movement (Movimiento Pregon); Alba Roba- 
Uo's left-wing Liberal Party (Partido Liberal), a sub-lema that joined 
in April 1989; the Nationalist Action Movement (Movimiento de 
Accion Nacionalista — MAN), a nationalist organization; the Popu- 
lar and Progressive Blanco Movement (Movimiento Popular Blanco 
y Progresista — MBPP), a moderate left-wing party; and the Move- 
ment for the People's Government (Movimiento por el Gobierno 
del Pueblo — MGP), which became, in August 1986, the tenth po- 
litical party of Uruguay to be created. The MGP subsequently 
merged with the PGP and adopted a social democratic program. 

The Broad Front was organized like a communist party. It had 
a party congress with decision-making powers, under which was 
a central committee-like body called the national plenum. A presi- 
dent, Seregni, headed the 108-member national plenum, which met 
at least once every two months. A political bureau, which includ- 
ed the president, exercised day-to-day authority. 

New Sector 

After breaking away from the Broad Front in early 1989, the 
PDC and PGP joined with the Civic Union (Union Civica— UC) 
to form a coalition called the Integration Movement (Movimiento 
de Integration — MI). The MI nominated the PGP leader, 
Batalla — a senator, journalist, and lawyer — as its 1989 presiden- 
tial candidate. On July 24, these three social democratic parties 
comprising the MI — the PGP, PDC, and UC — formally created 
a left-of-center electoral alliance within the MI called the New Sector 
(Nuevo Espacio), which reaffirmed Batalla as its presidential can- 
didate. 

Juan Guillermo Young and Carlos Vassallo, dissidents from the 
conservative Civic Union of Uruguay (Union Civica del 
Uruguay — UCU), a Catholic party founded in 1912, founded the 
PDC in 1962, when the UCU officially became the PDC. A left- 
of-center party, the PDC advocated social transformation through 
democratic means. The PDC soon fractionalized. In 1971, when 
the PDC joined with the PCU and PSU in the Broad Front, PDC 
dissidents, including former UCU members, broke away and 
formed the UC, an anti-Marxist social Christian party. The UC 
recognized a Christian democratic faction that also split from the 
PDC in 1980. From November 1982 to August 1984, the military 
regime banned the PDC for its policy of casting blank ballots. 

In the second half of the 1980s, the UC was divided between 
its traditional sector, the Progressive Faction (Corriente Progresis- 
ta), led by Humberto Ciganda and made up of other longtime 



178 



Government and Politics 



leaders, and the Renewal Faction (Corriente Renovadora), led by 
members of the Chamber of Representatives Julio Daverede and 
Heber Rossi Passina, UC secretary general Hector Perez Piera, and 
youth leaders. One leader of the UC's Progressive Faction, the late 
Juan Vicente Chiarino, served as Sanguinetti's defense minister. 
The withdrawal of the UC's presidential candidate, Ciganda, from 
the November 1989 elections widened the split within the party. 

Democratic Consolidation, 1985-90 

The Sanguinetti Administration 

The Sanguinetti government pursued a moderate and pragmatic 
approach to the nation's problems. Having inherited a US$4.9 bil- 
lion foreign debt accrued almost entirely during the military re- 
gime, the Sanguinetti government focused on foreign trade. On 
April 1, 1986, after several months of negotiations among the prin- 
cipal parties — the ruling Colorados, the Blancos, the Broad Front, 
and the UC — the leaders signed an agreement to promote the coun- 
try's economic and social development. 

In August 1986, Sanguinetti, with the backing of his Colorado 
Party, submitted an unrestricted amnesty bill for the military and 
police to the General Assembly as an extension of the pardon grant- 
ed to the Tupamaros. The government was able to obtain only fifty- 
five of the necessary sixty-six votes, however, so the proposal was 
rejected. The ruling Colorado Party then voted in favor of the bill 
sponsored by the National Party, which recommended trials only 
for those responsible for serious human rights violations. The Senate 
rejected the National Party bill as well, setting the stage for the 
worst political crisis in twenty months of democratic government. 
Lacking a majority in either of the two chambers, Sanguinetti met 
with opposition National Party leader Ferreira to attempt to reach 
a political solution on a number of points: the human rights issue; 
the extreme lack of expediency in General Assembly deliberations; 
interparty differences over the proposed national budget; and fre- 
quent clashes between the government and the opposition. In the 
first step leading to a resolution, the government and the National 
Party reached an agreement on the budget report, which the Gener- 
al Assembly subsequently approved. 

In December 1986, after acrimonious debate (including fistfights 
in the Chamber of Representatives), the General Assembly ap- 
proved the government's alternative to an amnesty, consisting of 
a ' 'full stop" to the examination of human rights violations com- 
mitted by 360 members of the armed forces and police during the 
military regime. According to Amnesty International, thirty-two 



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Uruguay: A Country Study 

Uruguayan citizens "disappeared," and thousands were victims 
of persecution and torture during that period. Groups opposed to 
what they called the "impunity" law — including the MNR, the 
Broad Front, the Tupamaros, the UC, and the most important 
labor confederation — launched a campaign, spearheaded by the 
MNR, to force a referendum on the issue. Led by human rights 
activists, university professors, and artists, these groups laboriously 
collected the required 555,701 "recall" signatures, all of which had 
to be certified by the Electoral Court. The measure carried by only 
230 signatures. According to the constitution, the signatures of at 
least 25 percent of the electorate are needed for the holding of a 
referendum to revoke a law passed by the General Assembly. 

Those who favored keeping the full-stop law — including the rul- 
ing Colorado Party and the Ferreira-led For the Fatherland (the 
principal National Party faction) — argued that the amnesty had 
given the country four years of stability and military obedience to 
democratic rule. They warned that a repeal could spark an army 
revolt. Nevertheless, the MRB supported the call for a referendum 
on the full-stop law. In the obligatory April 16, 1989, referendum — 
in which 85 percent of the population participated — Uruguayans 
voted by a decisive 57 percent to 43 percent to keep the full- stop 
law in effect and thereby maintain a peaceful democratic transi- 
tion. Although the referendum's aftermath was characterized by 
tranquillity and a spirit of reconciliation, it highlighted Uruguay's 
growing generation gap. Approximately 75 percent of Montevideo 
residents between eighteen and twenty-nine voted against the full- 
stop law. 

The November 1989 Elections 

Of the dozen candidates running for the presidency in the elec- 
tions of November 26, 1989, the two front-runners were the Na- 
tional Party's Lacalle and the ruling Colorado Party's Batlle Ibanez 
(see table 17, Appendix). Both were from political families and were 
grandsons of the founders of their respective parties. The tradi- 
tion of public service went back even further for Lacalle; his great- 
grandfather, Juan Jose de Herrera, was minister of foreign affairs 
in Blanco governments in the nineteenth century. Batlle Ibanez — a 
lawyer, senator, and leader of the Colorado Party's majority sec- 
tor, United Batllism (Batllismo Unido — BU) — descended from 
three presidents: his great-grandfather Lorenzo Batlle y Grau 
(1868-72), his great-uncle Jose Batlle y Ordonez (1903-07, 1911- 
15), and his father, Luis Batlle Berres (1947-51). 

The personalities of Lacalle and Batlle Ibanez, rather than poli- 
cy differences, dominated the campaign, although the issues debated 



180 



Flag-wavers outside the Legislative Palace on March 1, 1985, 
President Sanguinetti's inauguration day 
Courtesy Charles Guy Gillespie 

were the ones that traditionally distinguished the two parties. 
Whereas the Colorado Party emphasized the role of the govern- 
ment in promoting the national welfare, the National Party focused 
on Uruguay's people and society as being primarily responsible 
for their own destiny. The more controversial issues included 
" privatization" of state enterprises — such as the telephone com- 
pany and ports — and the extension of university education to the 
interior. Both Batlle Ibafiez and Lacalle advocated reducing the 
state's economic role, seeking foreign investment, and taking on 
the leftist-led unions. One difference was that Batlle Ibafiez favored 
paying the country's foreign debt, whereas Lacalle favored renegoti- 
ating it (see Foreign Policy in 1990, this ch.). In a televised debate 
in October 1989, Batlle Ibafiez repeatedly noted their agreement 
on issues, while Lacalle distanced himself from his opponent, there- 
by apparentiy outscoring him. In general, the campaign was very 
respectful and lacking in " dirty tricks." 

Other 1989 presidential candidates included, on the Blanco side: 
Carlos Julio Pereyra, leftist leader of the MNR; Alberto Saenz de 
Zumaran, a strongly antimilitary centrist endorsed by the Social 
Christian Movement (Movimiento Social Cristiano — MSC); and 
the CNH's Francisco Ubilles. On the Colorado side, candidates 



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Uruguay: A Country Study 



included Sanguinetti's former minister of labor and social welfare, 
Hugo Fernandez Faingold, the MAS leader; and Jorge Pacheco 
Areco, the former president (1967-72) and later ambassador to 
Paraguay, as well as leader of the Colorado and Batllist Union 
(Union Colorada y Batllista — UCB), who ran on a ticket with Pablo 
Millor Coccaro, whom he selected late in the campaign. Pache- 
co' s authoritarian and austere administration had been widely dis- 
liked, and Pacheco had spent his previous seventeen years out of 
the country — even serving as an ambassador for the military 
regime — but many Uruguayans still nostalgically identified him 
with a long- gone period of economic stability and security. 

Of the National Party's three candidates — Pereyra, Zumaran, 
and Lacalle — Lacalle initially had the least support among party 
members (20 percent), as compared with Pereyra (28 percent) and 
Zumaran (46 percent), according to a poll commissioned by a 
weekly news magazine, Busqueda, in July 1988. This standing was 
reversed, however, by September 1989 when, according to a poll 
in Montevideo published by Busqueda, 52 percent of those ques- 
tioned voted for Lacalle, 34 percent for Pereyra, and 10 percent 
for Zumaran. 

The total number of people duly registered to vote in the Novem- 
ber 26, 1989, presidential elections was 2.4 million, of which 47.3 
percent were Montevideo city residents and 52 . 7 percent were from 
the country's nineteen departments. In an upset for the Colorado 
Party, Lacalle and his running mate, Gonzalo Aguirre Ramirez, 
won after their party garnered 37.7 percent of the 2 million votes 
cast, compared with the Colorado Party's 29.2 percent, the Broad 
Front's 20.6 percent, and the New Sector's meager 8.6 percent. 
Other parties, including the EE-PV, received a total of 3.9 percent. 

The other big winner was the Broad Front, whose mayoral can- 
didate, Tabare Vazquez, captured Montevideo's municipal govern- 
ment. Vazquez, a cancer specialist and professor of oncology, as well 
as a member of the PSU's central committee, became the city's first 
Marxist mayor by obtaining 35 percent of the total vote. 

The Colorado Party lost not only the elections but also ten depart- 
ments and fifteen seats in the Chamber of Representatives. The 
National Party took seventeen departments, obtaining thirty-nine 
of the ninety-nine seats in the Chamber of Representatives; the 
Colorado Party, thirty; the Broad Front, twenty-one; and the New 
Sector, nine. Of the thirty Senate seats, the Blancos won twelve, 
the Colorados nine, the Broad Front seven, and the New Sector 
two. Aguirre 's own fledgling RV party overtook the veteran PLP 
and equaled the MNR by winning 1 12,000 votes, thereby winning 
two seats in the Senate and three in the Chamber of Representatives. 



182 



Government and Politics 



The Lacalle Administration 

A climate of labor unrest, imminent economic crisis, and grow- 
ing activism on the political left confronted Lacalle when he assumed 
office on March 1, 1990. Lacking a parliamentary majority, he 
formed a ' ' European- style" coalition, called National Coincidence 
(Coincidencia Nacional), with the Colorado Party, the first such 
interparty sharing of power in a quarter-century. Nevertheless, the 
two parties were able to agree only on sharing four cabinet appoint- 
ments and supporting the new government's fiscal-reform measures. 

Lacalle gave the posts of ministers of housing and social promo- 
tion, industry and energy, public health, and tourism to the Colo- 
rado Party in exchange for the necessary support in the General 
Assembly for approving various controversial projects regarding 
education, the fiscal deficit, and the right to strike — measures that 
labor unions and the left opposed. Lacalle chose Mariano Brito, 
a law professor with no previous government service, as his defense 
minister; Enrique Braga, one of his principal economic advisers, 
as his economy and finance minister; Hector Gros Espiell, a lawyer- 
diplomat, as his foreign affairs minister; and Juan Andres Rami- 
rez, a lawyer-professor who had not previously occupied any key 
position, as his interior minister. 

At the top of Lacalle 's policy priorities were regional economic 
integration and moving Uruguay toward a market economy, largely 
through privatization of inefficient state enterprises and through 
free trade (see Foreign Policy in 1990, this ch.). Unlike his predeces- 
sor, however, Lacalle found himself confronted with a Marxist 
mayor of Montevideo, whose Broad Front coalition was opposed 
to economic restructuring. By mid-1990 the prospects for a ''co- 
habitation arrangement" between the neoliberal, right-of-center 
president and Vazquez appeared poor. Shortly after taking their 
respective offices, the two leaders publicly clashed on departmen- 
tal government prerogatives. Vazquez sought to pursue autono- 
mous policies in areas such as transportation, public works, and 
health and to decentralize power in Montevideo Department. 
Lacalle opposed Vazquez's attempts to expand his departmental 
powers, arguing that a more powerful mayor of Montevideo would 
undermine the position of the executive branch. The confronta- 
tion that effectively ended the co-habitation arrangement took place 
over Montevideo's new budget, which Lacalle threatened to block. 

Political Forces and Interest Groups 

The Military 

Prior to the 1973 coup, the military exercised influence but had 



183 




184 



Punta del Este, host city to international conferences 
Courtesy Inter-American Development Bank 



185 



Uruguay: A Country Study 

rarely intervened directly in the political system. The fact that all 
of the defense ministers who served between 1959 and 1971 were 
military men indicated a degree of military influence. By 1984, 
when the military negotiated with the political parties on a transi- 
tion to democratic government, the armed forces were considered 
a de facto political force (see The Growth of Military Involvement 
in Politics, ch. 5). As Uruguay returned formally to democratic 
rule in 1985, the armed forces continued to exercise a degree of 
tutelage over national affairs, despite their depoliticized role. San- 
guinetti's defense minister was a retired lieutenant general, Hugo 
M. Medina (the only military defense minister to serve in the 
1980s), who as army commander in chief had refused to serve sub- 
poenas on military officers. A poll commissioned by Busqueda in 
September 1986 found that an overwhelming majority of Mon- 
tevideo's population believed, to varying degrees, that the mili- 
tary was still a factor in political power; only 10 percent believed 
that the military had no power. 

Some observers and political party leaders commented on alleged 
military pressure to defeat a call for prosecution of military officers 
for human rights abuses. The issue arose in December 1986 after 
the General Assembly approved the full- stop amnesty law, which 
exonerated 360 members of the armed forces and the police ac- 
cused of committing human rights abuses during the military re- 
gime. In one demonstration of possible continued military influence, 
Defense Minister Medina reflected military opinion in condemn- 
ing the April 1989 referendum to decide the validity of the am- 
nesty law. Medina emphasized that "the dignity of the national 
army" should not be violated. General Washington Varela, head 
of the Military Academy, warned that the army would "close 
ranks" if the amnesty were rescinded. 

Amnesty appeared to be firm, but the question of whether or 
not the military would retain its traditionally apolitical role in the 
future was less certain. Stating that "the Pandora's box of mili- 
tary intervention has been opened in Uruguay," Martin Wein- 
stein opined in 1989 that the military would continue to exercise 
a veto power over government action in human rights and mili- 
tary affairs and possibly assume a tutelary role in areas such as 
economic policy and labor relations. Military influence in the lat- 
ter two areas, however, had not yet manifested itself in 1990. In 
order to demonstrate his authority over the military, Lacalle ap- 
pointed a civilian as his defense minister and exercised his presiden- 
tial prerogative to appoint armed forces commanders of his own 
choosing, regardless of seniority. His appointments of the air force 



186 



Government and Politics 



and naval commanders were third and fourth in seniority, respec- 
tively, among serving officers. 

Labor Unions 

In March 1985, Sanguinetti abrogated laws and decrees issued 
by the military regime that had banned the labor unions, the im- 
munity of labor union leaders, and the right of public and private 
workers to strike. He also restored the legal status of the primarily 
communist-led National Convention of Workers (Convention Na- 
cional de Trabaj adores — CNT), dissolved by the military regime 
in 1973; in 1983 the Interunion Workers' Assembly (or Plenum) 
(Plenario Intersindical de Trabajadores — PIT) adopted the name 
PIT-CNT to show its link with the banned CNT. The long- 
repressed labor movement took advantage of its newly granted free- 
dom by staging strikes and marches during the first six months 
of democracy. 

The communist-led Uruguayan labor movement, which claimed 
to represent about 300,000 of the 1.3 million Uruguayan workers, 
also called general strikes in the late 1980s, as well as strikes in 
specific job areas, mostly involving civil service workers or those 
in state enterprises. In 1986 Sanguinetti 's government and the 
Colorado Party signed a "nonaggression" pact with the PCU. Un- 
der the Colorado-Communist Pact (the "Co-Co Pact"), militant 
labor members of the Colorado Party and the PCU formed alli- 
ances whenever the National Party promoted a movement within 
a labor organization. Nevertheless, the powerful main labor or- 
ganization, the PIT-CNT, staged three general strikes in 1986. 

The attitudes of the leadership of the Moscow-oriented World 
Federation of Trade Unions (WFTU), which was affiliated with 
the PIT-CNT, were among the main issues discussed by candi- 
dates in the 1989 presidential campaign. The leading candidates 
endorsed proposals for legislation to require secret strike votes and 
other union regulation. Labor activity in Uruguay was virtually 
unregulated. The WFTU supported the PCU and other leftist po- 
litical groups united in the Broad Front. In November 1989, the 
movement was preparing for a showdown with the mainstream po- 
litical leaders over whether or not to espouse a more market-oriented 
economy with foreign investment. Although the PIT-CNT's leader- 
ship opposed increasing foreign investment, the organization was 
becoming fractionalized among those influenced by perestroika (re- 
structuring) in the Soviet Union, those who rejected it, and non- 
Marxists seeking to challenge leftist domination of the movement. 

Lacalle advocated regulating labor union activities, including the 
right to strike. In his view, the decision on whether or not to strike 



187 



Uruguay: A Country Study 



should be made by the workers in a secret vote, after the failure 
of obligatory reconciliation efforts. Shortly after Lacalle took office, 
Minister of Labor and Social Welfare Carlos Cat, who ran for 
mayor of Montevideo in the 1989 elections, met with representa- 
tives of business organizations and the PIT-CNT but failed to reach 
an agreement. The PIT-CNT demonstrated its right to strike with 
a six-hour general work stoppage on July 25, 1990, to protest the 
government's austerity and privatization programs. 

Despite Lacalle's efforts to regulate the sector, Uruguay's labor 
movement in 1990 had significant clout as an interest group, mainly 
with regard to its highly disruptive strike tactics. Like leftist politi- 
cal organizations in general, however, the labor unions' continued 
use of the same rhetoric and methods that got results during the 
military regime were seen by some Uruguayan journalists and so- 
ciologists as major contributors to both emigration and apathy 
among young Uruguayans. 

The Roman Catholic Church 

The Roman Catholic Church has had only a minimal role in 
Uruguay because of a strong anticlerical bias bequeathed by Batlle 
y Ordonez. Unlike many other Latin American countries, religion 
has not interfered in politics to any significant extent. Although 
66 percent of the population was nominally Roman Catholic in 
1990, less than half were practicing Catholics. The church's main 
political wing was the PDC, which advocated social transforma- 
tion through democratic means. In addition, there were numer- 
ous lay organizations engaged in enhancing the church's social 
relevance. These included the Catholic Workers' Circle, Catholic 
Action, the Christian Democratic Youth Movement, and the 
Catholic Family Movement. The conservatives had few represen- 
tatives among the clergy. 

The election of Lacalle, a devout Catholic, may have reflected 
ascending Catholic influence in the nation. Another indicator of 
rising Catholic influence was the establishment in 1984 of the 
Catholic University of Uruguay in Montevideo, the country's only 
private university. However, the limits of Catholic influence in Uru- 
guay were highlighted in early 1986 by the failure of a proposal 
by Catholic conservatives in the Colorado and National parties to 
ban the film Hail Mary, which the church hierarchy regarded as 
"pornographic and blasphemous." 

Students 

Student organizations have had litde influence on their own, but 
they often supported the demands of labor unions and other groups. 



188 



Government and Politics 



The University of the Republic, Uruguay's only public universi- 
ty, played a key role as an opposition force during the administra- 
tions of Pacheco (1967-72) and Juan Maria Bordaberry Arocena 
(1972-76). Shortly after taking office, Sanguinetti ordered the resto- 
ration of the legal status of the Federation of Uruguayan Univer- 
sity Students (Federation de Estudiantes Universitarios del 
Uruguay — FEUU). The military regime, whose generals regard- 
ed the university as a center of leftist subversion, had banned the 
FEUU. University of the Republic student elections were held twice 
during the Sanguinetti administration, and student groups resumed 
campus political activities. As a result of the June 1989 university 
elections, leftists retained their dominance in 1990. 

The Media 

Uruguay's long tradition of freedom of the press was severely 
curtailed during the twelve years of military dictatorship, especially 
its final years under Lieutenant General Gregorio Alvarez Armelino 
(1981-85). During his administration, more than thirty news or- 
ganizations, including radio stations, publications, and television 
stations, were closed. On his first day in office in March 1985, San- 
guinetti reestablished complete freedom of the press. His govern- 
ment also abrogated a regulation that compelled all international 
news agencies to supply a copy of all disseminated political news 
to the Ministry of Interior. 

Although newspapers have played an important role in the evo- 
lution of Uruguayan party politics, they were generally affiliated 
with and dependent on one or the other of the traditional parties. 
This combination of party dependence before the military regime 
and censorship during it prevented the press and the media in 
general from developing into a Fourth Estate. After freedom of 
the press was restored in 1985, however, Montevideo's newspapers 
(which accounted for all of Uruguay's principal daily newspapers) 
gready expanded their circulations and presumably increased their 
influence (see table 18, Appendix). Most of the twenty-five to thirty 
interior newspapers were biweekly, except for a couple of regional 
dailies. 

Well over 100 periodicals were published in Uruguay. Busqueda 
(Search) was Uruguay's most important weekly news magazine. 
Founded in 1971 , Busqueda had close links to civilian economic offi- 
cials in the Sanguinetti and Lacalle governments and served as an 
important forum for political and economic analysis. A right-of- 
center, independent publication, Busqueda had a liberal editorial 
policy that espoused free markets, free trade, and private enter- 
prise and competition. Although it sold only about 16,000 copies 



189 



Uruguay: A Country Study 

a week, its estimated readership exceeded 50,000. The educational 
economic status of its readers placed them among the top 3 or 4 
percent of the population. 

Other periodicals included the PDC's Aqui, a weekly founded 
in late 1984; the monthly Cuadernos de Marcha, founded in 1985 by 
Carlos Quijano — who founded the former weekly procommunist 
newspaper Marcha in 1939 — and associated with the Broad Front; 
Zeta, a weekly founded in 1986 and affiliated with the PGP; and 
Mate Amargo, a fortnightly published by the Tupamaros with an 
estimated readership of 53,000. An additional 100 periodicals were 
imported from foreign countries. 

Fifteen foreign wire services had offices in Montevideo. Persons 
affiliated with the National Party established Uruguay's first pri- 
vate international news agency, PRESSUR, in 1984. The San- 
guinetti government had its own official news service, the 
Presidential Information Service (Servicio Presidencial de Infor- 
mation — SEPREDI), presumably retained by Lacalle with a new 
staff. The leading press associations were the Association of 
Newspapers of Uruguay, the Uruguayan Press Association, and 
the National Association of Uruguayan Broadcasters (Asociacion 
Nacional de Broadcasters Uruguayos — ANDEBU). 

Other Interest Groups 

Latinamerica Press reported that West German foundations had 
a heavy presence in Uruguay, where more than 100 research in- 
stitutes, all funded from abroad, were engaged in nearly 500 
projects. The report noted that the Colorado Party had developed 
close ties to the Hanns-Seidel Foundation over the years; the PDC 
and several Christian democratic business associations were con- 
nected to the Konrad Adenauer Foundation; the National Party 
received support from the Friedrich Naumann Foundation; and 
the PIT-CNT and PGP received financial support from the 
Friedrich Ebert Foundation. 

What influence, if any, these foundations had on government 
policies was unclear, although their presence presumably enhanced 
West German-Uruguayan relations. However, when Sanguinetti 
visited the Federal Republic of Germany (West Germany) in 1987 
and signed a technical assistance agreement with the right-wing 
Hanns-Seidel Foundation, a scandal erupted in Montevideo over 
whether West German development foundations were using their 
funds to influence Uruguayan politics. The agreement provided 
for assistance by the Hanns-Seidel Foundation to the Ministry 
of Interior in the development of an antiterrorism computer 
system. 



190 



Government and Politics 



Foreign Relations 

Uruguay's foreign policy has been shaped by its democratic tra- 
dition, its history of being a victim of foreign intervention, its sta- 
tus as the second smallest republic in South America (after 
Suriname), and its location between the two rival giants of the 
region: Argentina to the west and Brazil to the north. In the 
nineteenth century, Argentina and Brazil did not accept Uruguay's 
status as an independent republic, and they often invaded Uru- 
guayan territory (see Beginnings of Independent Life, 1830-52, 
ch. 1). The British and French consuls, for their part, often exer- 
cised as much power as the local authorities. Thus, Uruguay's in- 
ternational relations historically have been guided by the principles 
of nonintervention, respect for national sovereignty, and reliance 
on the rule of law to settle disputes. The use of military force any- 
where except internally was never a feasible option for Uruguay. 

According to Bernardo Quagliotti de Bellis, a Uruguayan profes- 
sor of law, his country had historically denned its foreign policy 
as based on five principles: affirmation of the right of self- 
determination of peoples; active participation in the process of po- 
litical cooperation that attempts to look within and outside the 
region; coordination of positions on everything possible; recogni- 
tion of the complexity and the diversity of the problems at hand; 
and flexibility combined with a sense of precaution. 

Beginning with Batlle y Ordonez's government in the early twen- 
tieth century, Uruguay has been active in international and regional 
organizations. It joined the United Nations (UN) in 1945 and has 
been a member of most of its specialized agencies. In 1986 Uru- 
guay was elected to membership in the UN's Economic and Social 
Council. In December 1989, Uruguay signed the United Nations 
Convention against Illicit Traffic in Narcotic Drugs and Psycho- 
tropic Substances. Uruguay belonged to thirty-one other interna- 
tional organizations as well, including the Organization of Ameri- 
can States (OAS), the General Agreement on Tariffs and Trade 
(GATT — see Glossary), the International Telecommunications 
Satellite Organization (Intelsat), the Latin American Economic Sys- 
tem (Sistema Economico Latinamericano — SELA), and the Latin 
American Integration Association (Asociacion Latinoamericana de 
Integration — ALADI; see Glossary). Uruguay was a signatory of 
the Inter- American Treaty of Reciprocal Assistance (Rio Treaty), 
the Treaty for the Prohibition of Nuclear Weapons in Latin America 
(Tlatelolco Treaty), and the Rio de la Plata Basin Treaty. 

Uruguay has had strong political and cultural ties with the coun- 
tries of Europe and the Americas. It has shared basic values with 



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Uruguay: A Country Study 



them, such as support for constitutional democracy, political plural- 
ism, and individual liberties. Historically, Uruguay has enjoyed 
a special relationship with Britain because of political and economic 
ties beginning in 1828 (see The Struggle for Independence, 1811- 
30, ch. 1). Bilateral relations with Argentina and Brazil have al- 
ways been of particular importance. In 1974 and 1975, Uruguay 
signed economic and commercial cooperation agreements with both 
countries. 

Traditionally, relations between Uruguay and the United States 
have been based on a common dedication to democratic ideals. 
Although it initially attempted neutrality in both world wars, Uru- 
guay ultimately sided with the Allies. In World War I, Uruguay 
did not break relations with Germany and lift its neutrality policy 
until October 1917. By that time, the government of Feliciano Viera 
(1915-19) had recognized "the justice and nobility" of the Unit- 
ed States severance of diplomatic relations with Germany in early 
1917. In 1941 President Alfredo Baldomir (1938-43) allowed the 
United States to build naval and air bases in Uruguay. The United 
States also trained and supplied Uruguay's armed forces. In January 
1942, one month after Japan attacked Pearl Harbor, Uruguay broke 
relations with the Axis. The United States reciprocated with gen- 
erous loans. As a condition for admission to the San Francisco con- 
ference, where the United Nations Charter was drawn up, Uruguay 
declared war against the Axis on February 15, 1945. That year 
it also signed the Act of Chapultepec (a collective defense treaty 
of the American republics) and joined the Inter- American Defense 
Board (IADB). In 1947 it signed the Rio Treaty, a regional alli- 
ance that established a mutual defense system. 

During the 1973-85 period of military rule, Uruguay's tradi- 
tionally democratic diplomacy was replaced by "military diploma- 
cy" as determined by the "Doctrine of National Security." This 
military diplomacy gave priority to the serious problem of nation- 
al and regional subversion and to historical conflicts affecting region- 
al diplomatic stability, such as the issues of dams between Argentina 
and Brazil, sovereignty over the Beagle Channel, Bolivia's attempts 
to regain access to the Pacific from Chile, the Ecuador-Peru bor- 
der dispute, and South Atlantic security. 

Foreign Relations under Democratic Rule, 1985-90 

With the return of democratic government in 1985, Uruguay's 
foreign policy underwent an abrupt change. After taking office, 
Sanguinetti vowed to maintain and increase diplomatic relations 
with every nation "that respects the international rules of non- 
interference in the internal affairs of other countries." He carried 



192 



Government and Politics 



out this policy by renewing relations with Cuba, Nicaragua, and 
China and by strengthening relations with the Soviet Union. 

Sanguinetti's first foreign affairs minister, Enrique Iglesias, con- 
ducted an intensive and successful diplomatic offensive to restore 
his country's prestige. Once again, Uruguay began to host impor- 
tant international meetings, such as the September 1986 GATT 
conference and the second meeting of the presidents of the Group 
of Eight (the successor organization of the Contadora Support 
Group) in October 1988, at the seaside resort of Punta del Este. 
More world leaders visited Uruguay during the Sanguinetti ad- 
ministration than ever before in Uruguay's history. 

An important element of the Sanguinetti government's foreign 
policy was the promotion of a more just world economy and of a 
more free and open trade system. Guided by Iglesias, Sanguinetti 
reintegrated Uruguay into the region, renewed and strengthened 
diplomatic and commercial relations with countries that were ig- 
nored for ideological reasons during the "military diplomacy" peri- 
od, negotiated new markets for Uruguayan products, instigated 
a new round of negotiations in GATT, and designed a new Latin 
American strategy for dealing with the foreign debt. In April 1988, 
after Iglesias' s election as president of the Inter- American Develop- 
ment Bank (IDB), Luis A. Barrios Tassano became Sanguinetti's 
second foreign affairs minister. Barrios described Uruguayan for- 
eign policy as "pluralist, multifaceted, nationalist, and flexible." 

The United States 

Although Uruguay was critical of unilateral United States mili- 
tary intervention in Latin America and elsewhere, bilateral rela- 
tions during the 1985-90 period were excellent. The United States, 
which had expressed deep concern about the human rights situa- 
tion beginning with the administration of Jimmy Carter, strongly 
supported Uruguay's transition to democracy. In March 1985, 
Secretary of State George P. Shultz attended Sanguinetti's presiden- 
tial inauguration. As a member of the Contadora Support Group, 
Uruguay participated in meetings on Central American issues in 
1985-86, particularly United States support for the anti-Sandinista 
resistance guerrillas in Nicaragua. The Sanguinetti government 
regarded United States aid to the anti-Sandinista Contra rebels in 
Nicaragua as an obstacle to peace in Central America. It also op- 
posed the presence of United States troops in Honduras. 

Despite his government's criticism of United States military ac- 
tions in Honduras, in Nicaragua, and against Libya in April 1986, 
Sanguinetti received a warm welcome at the White House during 
an official five-day state visit to the United States in June 1986, 



193 



Uruguay: A Country Study 



the first by a Uruguayan president in more than tinrty years. During 
the visit, which was dominated by trade discussions, Sanguinetti 
criticized United States protectionist policies, such as the decision 
to subsidize grain exports to the Soviet Union. Nevertheless, he 
departed Washington satisfied that the administration of President 
Ronald W. Reagan had adopted a more flexible policy toward Uru- 
guayan exports. Shultz again paid an official visit to Uruguay on 
August 5, 1988, for talks with Sanguinetti, Barrios, and several 
opposition leaders. The official talks centered on trade issues. 

Although Uruguay's relations with Panama at the time of the 
United States military intervention there in December 1989 were 
at their lowest possible level — without an ambassador — Sanguinetti 
was again critical of the United States. He characterized the United 
States military operation as a "step backward." 

Latin America 

Sanguinetti favored the formation of a bloc of debtor countries 
in Latin America to renegotiate the foreign debt. To that end, in 
the late 1980s Uruguay joined the Cartagena Consensus (of which 
Iglesias was secretary) on the foreign debt. Uruguay hosted the 
temporary secretariat of the Cartagena Consensus follow-up com- 
mittee, a group of Latin America's eleven most indebted countries. 

Uruguay also participated in the Group of Eight, a permanent 
mechanism for consultation and political coordination that succeeded 
the Contadora Support Group in December 1986. Like the Con- 
tadora Support Group, the Group of Eight advocated democracy 
and a negotiated solution to the Central American insurgency. It 
consisted of Argentina, Brazil, Colombia, Mexico, Panama, Peru, 
Uruguay, and Venezuela. The Sanguinetti government advocated 
a diplomatic solution to the insurgency in Central America based 
on the Caraballeda Declaration, a document drawn up on January 
12, 1986, by the Contadora Support Group. 

The Sanguinetti administration, after direct negotiations with 
Cuba, resumed Uruguay's commercial and cultural ties with the 
island nation in April 1985 and diplomatic and consular relations 
on October 17, 1985. It also reestablished diplomatic relations with 
Nicaragua. Uruguay had discontinued its diplomatic and consu- 
lar relations with Cuba on September 8, 1964, in compliance with 
the decision of the OAS General Assembly, which sought to iso- 
late the regime of Fidel Castro Ruz. 

The Sanguinetti government's differences with Cuba's politi- 
cal, social, and economic system, as well as with some foreign policy 
issues, remained. For example, Sanguinetti disagreed with Castro's 



194 




Embassy of the United States, Montevideo 
Courtesy Edmundo Flores 



proposal to discontinue payment on the Latin American foreign 
debt. Sanguinetti believed that the resulting financial and commer- 
cial isolation would provoke much worse problems. In his view, 
the Cartagena Consensus, rather than a meeting in Havana, was 
the appropriate forum in which to discuss the debt issue. Both coun- 
tries strengthened bilateral relations, however, by signing commer- 
cial agreements in May 1986 and March 1987 and by signing a 
five-year economic, industrial, scientific, and technical coopera- 
tion agreement on the latter occasion. 

Sanguinetti considered regional integration in the Rio de la Plata 
Basin the key to Uruguay's foreign policy. Uruguay's efforts at 
promoting integration were aided in the late 1980s by the emer- 
gence of democratic governments in Argentina, Bolivia, Brazil, 
Chile, Peru, and Paraguay. Sanguinetti sought a closer relation- 
ship with Argentina, Brazil, and Paraguay in the belief that Uru- 
guay's future was closely linked to the possibility of the integration 
of the Rio de la Plata Basin. Although the Sanguinetti government 
supported Argentina's claim to sovereignty over the Falkland Islands 
(Islas Malvinas), it adopted a neutral stance in the conflict between 
Argentina and Britain (which waged the South Atlantic War over 
the islands from April to June 1982) and made known its desire 
that military bases and other facilities not be installed in the South 



195 



Uruguay: A Country Study 



Atlantic. In May 1985, Argentina and Uruguay signed the Decla- 
ration of Colonia, which established the framework for promoting 
economic and social integration between the two countries. 

Sanguinetti initiated a similar program of integration with Brazil. 
In August 1985, the Brazilian and Uruguayan presidents strength- 
ened bilateral relations by holding the first meeting of the General 
Coordinating Commission and signing thirteen bilateral accords. 
The presidents of Argentina, Brazil, and Uruguay met in Brasilia 
in 1986 to advance their integration process. In January 1990, San- 
guinetti hosted an official visit by the Paraguayan president, Army 
General Andres Rodriguez Pedotti, during which integration mat- 
ters such as the River Transport System (consisting of the Rio 
Paraguay-Rio Parana-Rio Uruguay waterway) were discussed. 

Other Regions 

Since 1926 and renewed in 1943, Uruguay has had diplomatic 
and trade relations with the Soviet Union, longer than any other 
South American nation. Relations were at a relatively low level 
during the military regime. In May 1985, the Sanguinetti govern- 
ment authorized the reopening of the Soviet-Uruguayan Cultural 
Center and, in September 1986, the opening of an office of the 
Soviet airline Aeroflot (Air Fleet) in Montevideo, with flights to 
Moscow beginning in 1987. During a meeting with Soviet foreign 
affairs minister Eduard A. Shevardnadze at the UN on Septem- 
ber 24, 1985, Sanguinetti asked for the Soviet Union's support for 
Uruguay's desire to join the group of nations operating in Antarc- 
tica (which Uruguay subsequendy joined). Shevardnadze later visit- 
ed Uruguay in October 1987. 

In the first visit of a Uruguayan president to the Soviet Union, 
Sanguinetti visited Moscow in March 1988 and held a ' 'cordial 
and frank" two-hour meeting with General Secretary Mikhail S. 
Gorbachev. Sanguinetti' s visit strengthened trade, economic, and 
cultural relations, to include the establishment of a joint Soviet- 
Uruguayan company. Sanguinetti also visited certain East Euro- 
pean countries, including the German Democratic Republic (East 
Germany), and established trade relations. 

Optimistic about trade prospects, Uruguay established diplomatic 
and formal commercial relations with China on February 3, 1988. 
By 1990 China was Uruguay's fourth largest trading partner. 
Although both countries had conducted bilateral trade, diplomat- 
ic relations had been nonexistent since 1949. With the opening of 
diplomatic ties with China, Uruguay simultaneously severed rela- 
tions with Taiwan. In November 1988, Sanguinetti paid a six-day 
official visit to China at the head of an eighty-member delegation 



196 



Government and Politics 



and signed four agreements designed to further strengthen bilateral 
relations. China's President Yang Shangkun reciprocated with a 
visit to Uruguay in May 1990. The Sanguinetti government also 
established trade ties with Malaysia and Singapore and was plan- 
ning to reopen Uruguay's mission in India. 

When Sanguinetti assumed office, Uruguay had only four resi- 
dent ambassadors in all of the Middle East and Africa. By 1988 
Uruguay had opened resident missions in Algeria and Cote d'lvoire, 
had reestablished relations with Tanzania, and had established ties 
with Oman, Qatar, and Bahrain. In May 1986, the Sanguinetti 
government criticized what it termed the sovereignty and territorial 
integrity violations committed by the South African government 
against neighboring countries. It also denounced apartheid and stat- 
ed its support for the peoples and governments of Botswana, Zam- 
bia, and Zimbabwe against South African aggression. Although 
the Sanguinetti government announced in May 1986 that it was 
unwilling to recognize the Palestine Liberation Organization (PLO), 
which it characterized as a terrorist organization, it accorded an 
official reception at the Ministry of Foreign Affairs to a PLO dele- 
gation participating in the first parliamentary congress of socialist 
parties in Latin America and the Caribbean in June 1989. 

Foreign Policy in 1990 

The general direction of Uruguayan foreign policy was not ex- 
pected to change significantly under President Lacalle. His newly 
designated foreign affairs minister, Hector Gros Espiell, told report- 
ers in January 1990 that although there would be specific changes, 
adjustments, and differing viewpoints, the Lacalle government in- 
tended to maintain the general guidelines of Uruguay's existing 
foreign policy. Gros Espiell, the former head of Uruguay's School 
of Diplomacy, also noted, however, that under the new Foreign 
Service Law to be submitted to the General Assembly by the Lacalle 
government, the foreign service would be entirely revamped to make 
its operations more responsive to the national interests. 

Gros Espiell also explained that the Lacalle government's for- 
eign policy would emphasize the trend toward regional integra- 
tion and that Uruguay would continue pursuing its integration 
policy with Argentina and Brazil. According to Gros Espiell, the 
Rio de la Plata Basin would be Uruguay's first priority in foreign 
policy, with the Buenos Aires-Montevideo-Brasflia axis function- 
ing in coordination with the Montevideo- Asuncion-La Paz axis. 
In talks with the presidents of Argentina, Brazil, and Paraguay 
in early 1990, Lacalle discussed ways to increase regional integra- 
tion in the Rio de la Plata Basin. One of Lacalle 's foreign policy 



197 



Uruguay: A Country Study 

goals was to integrate Bolivia and Paraguay into the Brazilian- 
Uruguayan- Argentine integration agreements and grant them free 
port facilities. 

Lacalle favored using the Group of Eight and ALADI as instru- 
ments for promoting, with Argentina, a new Latin American in- 
tegration process. In January 1990, he worked toward this through 
what he called the Group of Seven (because Panama's member- 
ship was suspended in February 1988) with the intention of or- 
ganizing, within five to ten years, a true Latin American common 
market. The Lacalle government wanted the Group of Eight (whose 
name was changed in 1 990 to the Group of Rio) to expand to in- 
clude Bolivia, Chile, Ecuador, and Paraguay. 

Lacalle told United States president George H.W. Bush during 
their unofficial meeting at the White House on February 5, 1990, 
that Uruguay could play an important role in the Rio de la Plata 
Basin, but this role did not materialize in 1990. The Lacalle govern- 
ment reportedly had become uneasy over what it perceived to be 
a lack of interest toward integration with Uruguay shown by Ar- 
gentina and Brazil (see Economic Integration, ch. 3). 

Both pro-United States and pro-free market, Lacalle was expected 
to enjoy excellent relations with the Bush administration. Lacalle' s 
support of the United States varied, however, depending on the 
issue. When the United States military intervened in Panama in 
December 1989, Lacalle refused to recognize the new Panamani- 
an government of Guillermo Endara. After the United States troops 
retreated to the former Canal Zone and their number was reduced 
to preintervention levels, Lacalle announced in March 1990 that 
his government would normalize relations with Panama by recog- 
nizing the Endara government. In keeping with its traditional po- 
sition condemning the use of force, the Lacalle government 
denounced the invasion of Kuwait by Iraq in early August 1990, 
urged action by the UN Security Council, and endorsed the UN 
sanctions against Iraq. 

On other issues, Lacalle favored the United States policy posi- 
tion on the foreign debt problem and negotiated Uruguay's exter- 
nal debt based on a proposal presented by Secretary of the Treasury 
Nicolas Brady in March 1989. The Brady Plan called for creditor 
banks to write off a portion of a developing country's indebted- 
ness in return for guaranteeing repayment of the remaining debt 
(see Foreign Debt, ch. 3). Lacalle enthusiastically endorsed Presi- 
dent Bush's Enterprise for the Americas Initiative (see Glossary), 
made on June 27, 1990, for promoting the development of Latin 
America by opening a free-trade partnership with the region, either 
on a bilateral or on a multilateral basis. Lacalle was somewhat 



198 



President Lacalle addressing the Organization of American 
States, Washington, September 1990 
Courtesy Organization of American States (Roberto Ribeiro) 

ambivalent, however, toward the United States policy on drug 
trafficking. He viewed the issue as two sided, involving not only 
the Latin American producing countries but also the principal con- 
suming country, the United States. 



Although few books on Uruguay's government and politics in 
the 1980s were available in 1990, Uruguay has been the subject 
of considerable scholarly research. M.H.J. Finch and Alicia Ca- 
sas de Barran's Uruguay lists comprehensively and evaluates suc- 
cinctly major sources, including recent doctoral dissertations, on 
all aspects of Uruguay. A dated but still historically useful book 
is Russell H. Fitzgibbon's Uruguay: Portrait of a Democracy. A more 
up-to-date introduction to the country is Martin Weinstein's Uru- 
guay: Democracy at the Crossroads; his earlier book, Uruguay: The 
Politics of Failure, analyzes the causes of Uruguay's descent from 
a model democracy to a military dictatorship. The human rights 
abuses committed by the military are detailed in Lawrence Wesch- 
ler's A Miracle, a Universe: Settling Accounts with Torturers. An inci- 
sive fact-filled chapter on Uruguay's party system may be found 



199 



Uruguay: A Country Study 



in Party Politics and Elections in Latin America by Ronald H. McDonald 
and J. Mark Ruhl. In-depth analyses of the political party system 
in the 1970s and early 1980s can be found in two Yale University 
doctoral dissertations: Charles Guy Gillespie's "Party Strategies 
and Redemocratization," and Luis E. Gonzalez's "Political Struc- 
tures and the Prospects for Democracy in Uruguay." Gillespie's 
Negotiating Democracy: Politicians and Generals in Uruguay focuses on 
Uruguay's transition to democracy. An informative monograph 
on the November 1989 elections is Weinstein's "Consolidating 
Democracy in Uruguay: The Sea Change of the 1989 Elections." 
(For further information and complete citations, see Bibliography.) 



200 



Chapter 5. National Security 



The colonial fortress museum of Santa Teresa National Park 
near Laguna Negra in Rocha Department 



AS OF 1990, URUGUAY FACED no external threat. Its defense 
posture was based on the country's geostrategic position as a buffer 
state. Defense planners recognized that the nation could never in- 
dependently deter invasion, however unlikely, by either of its two 
giant neighbors — Argentina and Brazil — and instead counted on 
obtaining aid from one should the other attack. As a result, the 
armed forces were chiefly organized to cope with internal threats, 
although Uruguay had no terrorist or insurgency problem in the 
1980s and 1990. 

During the 1960s and early 1970s, an urban guerrilla movement — 
the National Liberation Movement-Tupamaros (Movimiento de 
Liberacion Nacional-Tupamaros — MLN-T) — posed a significant 
threat to national security. The military ruthlessly suppressed the 
Tupamaros in 1972 after the police proved unable to do so. 
Although the Tupamaros had been brought under control by then, 
the military seized control of the government of Juan Maria Bor- 
daberry Arocena (1972-76) in 1973 in order to suppress all activi- 
ty it interpreted as threatening the public order. The military's effort 
to rationalize and legitimize its role as political arbiter was reject- 
ed in a 1980 referendum. The defeat was attributable to the coun- 
try's strong national democratic tradition and to public bitterness 
over human rights abuses under military rule. The military, itself 
divided over the armed forces' proper role in national political life, 
accepted the public's decision, and civilian rule was restored com- 
pletely in 1985. 

After the resumption of civilian rule, the armed forces occupied 
a position much like that during the period before military rule; 
they were under the control of the civilian government and were 
largely excluded from national political and economic decision mak- 
ing. The armed forces continued to embrace a conservative and 
anticommunist political orientation. The military leadership, 
however, expressed its commitment to a pluralist democratic sys- 
tem on several occasions during the late 1980s and in 1990. 

Acknowledging reluctandy that the nation faced no serious threat 
to internal order and sensitive to the dictates of a constrained na- 
tional economy, during the late 1980s the military accepted an 
approximately 20 percent reduction in personnel, as well as a sig- 
ficant reduction in spending. As of 1990, armed forces strength 
was about 25,200, somewhat higher than the level maintained dur- 
ing premilitary rule. 



203 



Uruguay: A Country Study 

The army was deployed geographically under regional headquar- 
ters; it was organized and equipped principally as a counterinsur- 
gency force. The navy operated a coastal and riverine patrol fleet; 
it was supported by a small naval air arm. The air force provided 
counterinsurgency air support and transport and logistics services. 
Equipment in all three services was aging or obsolete, and, because 
of shortages of spare parts, some equipment could not operate. The 
straitened national economy, however, made replacement or modern- 
ization of the armed forces inventory unlikely in the near term. 

Public order in the late 1980s was chiefly disturbed by occa- 
sional — and usually not very lengthy — public demonstrations or 
labor actions. Little violence was associated with such activities, 
and for the most part the National Police were able to maintain 
public order and contain ordinary crime without resorting to un- 
usual force. The National Police were divided into local commands 
under a departmental chief in each of the country's nineteen 
departments. 

Criminal justice was the responsibility of the national govern- 
ment. The Supreme Court of Justice administered the national 
judiciary and the country's criminal courts. Constitutional guaran- 
tees regarding civil rights and the right to a fair trial were routinely 
honored. Political prisoners were granted amnesty in 1985 and 
released from prison; there have been no credible reports of politi- 
cal arrests or human rights abuses since that time. 

The Origin and Development of the Armed Forces 

The military history of Uruguay is rooted in seventeenth- and 
eighteenth-century clashes between settlers from Spain's Viceroyalty 
of the Rio de la Plata, ruled from Buenos Aires to the west, and 
settlers from Portugal's Viceroyalty of Brazil to the northeast (see 
The Struggle for Independence, 1811-30, ch. 1). At stake was the 
territory on the east bank of the Rio Uruguay known as the Ban- 
da Oriental (eastern side, or bank), which formed a buffer between 
the two viceroy alties. In 1720 Spanish colonists built a fortress at 
Montevideo as an overt manifestation of their interest in the Ban- 
da Oriental and to put a stop to Portuguese expansion. 

Evolution of the Army 

The first armed forces associated with the Banda Oriental, or 
what was to become Uruguay, developed after the Spanish hold 
on Buenos Aires ended in 1810. Montevideo, the only Spanish 
stronghold in the area, soon became embroiled in the conflict, and 
residents of the interior of the Banda Oriental rebelled against Span- 
ish rule. Led by Jose Gervasio Artigas, the independence movement 



204 




The colonial Watchman 's Tower at Maldonado 
Courtesy Prints and Photographs Division, Library of Congress 



205 



Uruguay: A Country Study 

was started by a band of guerrillas that first joined with the in- 
dependent government in Argentina to help free Montevideo from 
Spanish rule. General Artigas prematurely declared Uruguay in- 
dependent in 1815 and formally took control of the new national 
army, which consisted of one battalion of ethnic European settlers 
and one battalion of freed slaves (see Artigas' s Revolution, 181 1-20, 
ch. 1). 

After Uruguay became an independent state in 1828, the new 
nation's army consisted of a poorly organized irregular militia, of 
which a substantial portion of personnel were inducted slaves or 
minor criminals condemned to service. The army was employed 
in a short campaign in 1832 against a remnant Indian force. The 
low quality of the army's personnel and its poor public image, 
however, made it neither an influential force in politics nor an ef- 
fective military establishment. 

Independence did not bring peace or an end to foreign military 
intervention. Uruguay was plagued by chronic disorder and repeat- 
ed insurrections supported by various foreign powers (see Begin- 
nings of Independent Life, 1830-52, ch. 1). Most of the disorder 
derived from political factionalism, as evidenced in the 1836 struggle 
between forces led by the nation's first president, General Jose Fruc- 
toso Rivera (1830-35, 1838-43), and his successor, General Manuel 
Oribe (1835-38), who was backed by Argentina. In 1838 Rivera's 
army prevailed, and Oribe fled to Buenos Aires. Oribe returned 
in 1842, however, and, using Blanco and Argentine forces, com- 
menced a nine-year siege of Montevideo that attracted French, 
British, and Italian intervention. The siege and the war between 
Colorado forces in Montevideo and Blanco forces outside the cap- 
ital, known as the Great War (Guerra Grande, 1843-52), helped 
forge the identities of what were to become the nation's two 
dominant political parties (see Political Parties, ch. 4). 

The end of the nine-year siege of Montevideo was followed by 
renewed conflict and foreign intervention. The Uruguayan Army 
in 1852 consisted of infantry, cavalry, and artillery elements and 
had a total strength of some 1,800 personnel; it was nonetheless 
unable to control the private political armies kept by local caudil- 
los. In 1858 the country established the National Guard, in which 
males between seventeen and forty- seven years of age were required 
to serve. The main effect of the National Guard, however, was 
to provide local caudillos with better-trained personnel for their 
armies, which operated under the auspices of various factions of 
the Colorado Party (Partido Colorado) or the National Party (Par- 
tido Nacional, usually referred to as the Blancos). 



206 



National Security 



Foreign intervention on behalf of the Blancos by Francisco Solano 
Lopez, the Paraguayan dictator, embroiled Uruguay in a bloody 
war between the Triple Alliance of Argentina, Brazil, and Uru- 
guay on the one side and Paraguay on the other side. During the 
War of the Triple Alliance (1865-70), some 3,000 Uruguayan 
troops joined the more professional armies of Brazil and Argenti- 
na. The Uruguayan Army emerged from the experience with some- 
what more professional standards. 

After the challenge of facing a foreign threat ended, the pattern 
of armed Colorado-Blanco clashes resumed. The war had strength- 
ened the sense of national identity, but party loyalty remained in- 
tense, and for many Uruguayans it surpassed loyalty to the state. 
The army, itself highly politicized, worked to control banditry, en- 
gaged in public- works projects, and was active in controlling clashes 
between the private political armies. The number of combatants 
in the interparty struggles was never large, and the clashes were 
punctuated by a number of peace pacts that ended specific upris- 
ings and formally redistributed power held by the dominant C dora- 
dos in Montevideo to accommodate Blanco aspirations outside the 
capital. 

The party clashes peaked around the turn of the twentieth cen- 
tury. A serious Blanco rebellion in 1897 ended in a "pact between 
the parties," but, as in the past, the Blancos used the opportunity 
to consolidate their power and improve their armed strength. Af- 
ter Colorado president Jose Batlle y Ordonez (1903-07, 1911-15) 
moved to check Blanco growth, Blanco rural leaders rose up in 1904 
in the last of the armed conflicts between the two parties (see The 
New Country, 1903-33, ch. 1). 

After the defeat of the Blanco uprising, the army replaced the 
private armed forces of the caudillos as the nation's dominant armed 
force. Batlle y Ordonez appointed and promoted only loyal officers; 
by 1915 almost all army officers were Colorados. In recognition 
of the politicization of the army and its growing influence, Batlle 
y Ordonez and other civilian leaders followed a careful policy of 
balancing frequent transfers of loyal and suspected units in and 
out of Montevideo with increased investment in weaponry and in- 
creased personnel. As a result, the army nearly doubled in size be- 
tween 1904 and 1914; it grew from about 6,000 to 12,000 personnel. 
Its position as the nation's preeminent military force was strength- 
ened after Uruguay made it illegal to address nonmilitary persons 
with a military title, which had formerly been a common practice 
among Blanco forces. 

As the prospect of further revolution subsided, the active-duty 
forces were reduced through attrition in an effort to circumscribe 



207 



Uruguay: A Country Study 



the army's political role. The army was spared serious budget cut- 
ting but was reorganized into smaller units intended to be expanded 
in wartime. The increase in the number of units meant more officers 
and more promotions; at the same time, the increase in the num- 
ber of units also made it harder for officers to forge a unified polit- 
ical force. The government and the armed forces leadership placed 
new emphasis on developing an apolitical and professional mili- 
tary institution, and as a result the army essentially withdrew from 
the political arena. 

After World War I, the army came under the influence of a 
French military mission, and officers began to train at the Mili- 
tary Academy at St. Cyr, France, and at various specialty schools 
of the French army. Under a French plan, the country was divid- 
ed into four military regions, and the military air arm was strength- 
ened. Modern equipment, including aircraft, was imported from 
various European sources. The army was used to support a coup 
by President Gabriel Terra (1931-38) in 1933 but did little except 
to prevent legislators from entering the General Assembly (the na- 
tion's bicameral legislature). 

During World War II, the United States replaced France as the 
nation's foremost foreign military influence. United States assistance 
under the Lend-Lease Agreement focused primarily on aviation. 
The armed forces spent the 1950s and 1960s pursuing a program 
of gradual equipment modernization. 

Development of the Navy 

The Uruguayan Navy was formally established in 1860, and its 
forces saw action during the War of the Triple Alliance, principal- 
ly in a transport capacity. The modern Uruguayan Navy, however, 
owes its professional development to the establishment in 1885 of 
the Military Academy, which offered training to naval and other 
officers. By 1910 navy strength was some 1,300 in all ranks, and 
vessels included gunboats (some armed with torpedoes), steamers, 
and various other small craft. The separate Naval Academy was 
established in 1916. 

After World War I, many of the navy's aging vessels were with- 
drawn from service, and replacement was slow. The Naval Air Ser- 
vice was formed in 1925, but the first aircraft were not acquired 
until 1930. The only significant purchase of vessels between the 
wars was three patrol vessels and a training ship. Personnel declined 
to fewer than 1,000. 

After the outbreak of World War II and the December 1939 Bat- 
tle of the Rio de la Plata, the government decided to strengthen 
the navy and the Naval Air Service (see Baldomir and the End 



208 



National Security 



of Dictatorship, ch. 1). During the 1940s and 1950s, the navy, and 
naval aviation in particular, benefited from United States military 
assistance. In 1959 Uruguay — along with the United States, 
Argentina, Brazil, and Venezuela — participated in the first large 
multinational exercise involving Latin American navies. Although 
the air arm (renamed the Naval Aviation Service in 1951) accounted 
for 50 percent of naval personnel in 1952, by the late 1960s naval 
air assets had begun to be withdrawn from service, and few modern 
replacements were acquired. At the same time, the fleet under- 
went a modest expansion, and a battalion of marines was added. 
During the 1970s, the government acquired a small number of ves- 
sels to replace aging equipment. In 1981 three large patrol craft 
were purchased new from France. The sole addition in the late 1980s 
was a frigate purchased used from the French navy and commis- 
sioned in late 1988. In early 1990, the Uruguayan Navy received 
two decommissioned United States Coast Guard cutters for coastal 
patrol and antinarcotics work under a United States Department 
of State antinarcotics program. Acquisitions were insufficient to 
offset the number of retired vessels, however, and a further reduc- 
tion of the navy's assets seemed likely as more vessels had to be 
withdrawn from service. 

Creation of an Independent Air Force 

Military aviation began in 1913 as the Military Aeronautics 
Branch of the army, and as early as 1916 a flight training school 
was established near Montevideo. By the 1930s, the service com- 
prised one bomber and three reconnaissance flights. It operated 
out of bases at Paso de Mendoza near Montevideo, at Durazno, 
and at the Military Air School at Pando in Canelones Department. 
Beginning in the late 1940s, United States military assistance fo- 
cused on military aviation, and the inventory of military aircraft 
increased in number and quality. The Air Force Academy was es- 
tablished at Pando in 1950, and aviation instruction formerly con- 
ducted at the Military Academy was discontinued. In late 1953, 
the Uruguayan Air Force, which had continued to function as an 
integral part of the army, was established as an autonomous or- 
ganization, equal in status with the army and the navy. 

During the 1950s, the air force inventory was relatively well de- 
veloped. As equipment aged, however, economic constraints 
prevented replacement, and the inventory grew smaller. By 1990 
the air force had shrunk to a very modest size (about 100 aircraft) 
and operated largely obsolete equipment. Given the nation's con- 
tinued economic problems and the low- threat environment, the air 



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Uruguay: A Country Study 



force appeared likely to remain a well- trained, professional force 
but one that was poorly equipped. 

The Growth of Military Involvement in Politics 

Until the 1960s, the military was mostly ignored by politicians 
and played a marginal role in Uruguayan political life. A military 
career lacked prestige and respect. Officers came mainly from the 
lower middle class in the small towns and cities of the interior; troops 
were recruited from the lowest strata of the rural sector, mainly 
from the estancias (ranches) or from the ranks of the unemployed 
in the urban shanty towns (cantegriles) . 

In the second half of the 1960s, the military began to function 
in a limited law enforcement capacity after the national economy 
suffered a serious downturn and public discontent increasingly came 
to disrupt internal order. Initially backing up the National Police 
in confrontations with union members, students, and other pro- 
testers, the military was drawn further into the struggle as the de- 
cade progressed, manning road blocks, conducting searches, and 
eventually becoming targets themselves. The most significant threat 
to public order was the growth of the urban guerrilla movement 
known as the MLN-T, whose adherents were more commonly 
known as Tupamaros. 

The armed forces leadership was divided internally over the mili- 
tary' s new role, but antipathy toward the Tupamaros' Marxist po- 
litical philosophy was strong among the politically conservative, 
staunchly anticommunist military leadership. Initially, the police 
had been charged with handling the problem, but as the disorder 
worsened, many in the armed forces grew impatient with the police's 
lack of success. When President Jorge Pacheco Areco (1967-72) 
called on the army to take over responsibility for the problem on 
September 9, 1971, the Army Intelligence Service began to draw 
up a military offensive. After the Tupamaros escalated the guer- 
rilla campaign in April 1972, President Bordaberry, Pacheco 's suc- 
cessor, and the General Assembly declared a state of "internal war" 
against them. The army was prepared, and the insurgency was 
crushed within a few months (see Pachequism, 1967-72, ch. 1). 

By this time, however, the armed forces leadership had agreed 
that the military's duty to the nation required it to pursue a level 
of internal order that was untroubled by leftist, student, labor, or 
other opposition or protest. The suspension of constitutional pro- 
tections during the state of internal war was therefore prolonged 
by new legislation that put harsh controls on the press and on dis- 
sent. The new laws also stated that persons charged with crimes 



210 



National Security 



against the national security were denied normal legal protections 
and were subject to preventive detention and trial in military courts. 

In June 1973, the military compelled President Bordaberry to 
accept suspension of the democratic process and institute military 
rule through the creation of the National Security Council (Con- 
sejo de Seguridad Nacional — Cosena), made up of the commanders 
in chief of the army, navy, and air force, plus an additional senior 
military officer, and the ministers of national defense, interior, and 
foreign affairs. The General Assembly was abolished on June 27 
and replaced with the thirty-member Council of State (Consejo de 
Estado). A new armed forces organic law, adopted in February 
1974, assigned the military the role of protector of the nation's tradi- 
tional way of life against a communist threat. Beyond that general 
mission, however, the military had no coherent ideological agen- 
da or any organized plan for national development. No charismatic 
military leader emerged to centralize power. Instead, decision mak- 
ing was characterized by consensus among senior officers, who were 
determined to use the military's new powers to impose internal 
order (see The Military Government, 1973-85, ch. 1). 

Until the 1972-73 period, the Uruguayan armed forces were 
among the least politicized in Latin America. The military had littie 
experience in political affairs and no corporate political philosophy 
beyond a belief in democracy and an antipathy toward communism 
and extreme leftist political thought. Many within the armed forces 
viewed the military's assumption of power in 1973 as a necessary 
but unfortunate interruption of the nation's democratic tradition. 
A significant element within the military was never comfortable 
with the institution's expanded role, however. Nonetheless, dur- 
ing the period of military rule, senior and sometimes mid-level 
officers served in positions of responsibility in various government 
agencies, the National Police, some businesses, and autonomous 
entities (autonomous agencies or state enterprises; see Glossary). 
In general, military personnel assigned to such posts found them- 
selves poorly prepared in terms of either training or education to 
take on new responsibilities. 

During the 1973-80 period, the military moved ruthlessly against 
all it deemed a security threat. An estimated 6,000 citizens were 
tried in the military courts, and critics charged that tens of thou- 
sands were detained, denied legal rights, or abused or tortured. 
During the same period, the military grew from some 22,000 to 
an estimated 30,000, and military officers began to serve as heads 
of state enterprises and as governors of departments. 

In 1980 the military government attempted to legitimize the 
armed forces' political role by submitting to public referendum a 



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Uruguay: A Country Study 



new constitution that effectively gave the armed forces veto power 
within a restricted democracy. The regime publicly campaigned 
that the constitution moved the nation toward democracy. The 
government also identified opposition to the referendum with sup- 
port for communism or, conversely, with support for continued 
military rule. Nonetheless, opposition positions were permitted ex- 
pression, and the proposed constitution was rejected by 57 per- 
cent of the populace. 

The armed forces leadership then instituted a process of slow 
disengagement from economic, political, and administrative posi- 
tions of power. Surprising many local and foreign observers, the 
president of the Council of the Nation (Consejo de la Nacion, con- 
sisting of the Council of State and twenty-eight military officers), 
which became the supreme governing body in 1976, appointed a 
retired military general as president of an interim administration 
designed to initiate a process to return the country to civilian leader- 
ship in 1985. In March 1984, the military negotiated the Naval 
Club Pact with most of the nation's political parties to design the 
transition, which included reestablishment of the General Assem- 
bly. In March 1985, a new civilian president, Julio Maria San- 
guinetti Cairolo (1985-90), was inaugurated. After 1985 the military 
leadership devoted itself to the management of a depoliticized and 
professional armed forces establishment. 

The process of the military's withdrawal from national political 
life was difficult. There were charges in the 1985-86 period, for 
instance, that the armed forces intelligence services continued to 
monitor opposition groups as potential sources of subversion. Such 
charges had died down by the late 1980s, after passage of a new 
armed forces law that reaffirmed the supremacy of civilian com- 
mand and after senior military leaders made public statements of 
allegiance to civilian democratic rule. 

The most difficult issue facing the nation in the wake of the return 
to civilian rule was how to treat military officers who had committed 
offenses during the period of military rule. In an effort to calm mili- 
tary and police fears and to put the nation's troubled past behind it, 
the Chamber of Representatives passed, by a vote of sixty to thirty- 
seven, an amnesty bill on December 22, 1986, to prevent prose- 
cution of nearly all such offenses. Almost immediately, opponents 
of the law launched a movement to bring the bill to a public referen- 
dum. After protracted legal deliberations, the bill was placed before 
the voters in 1989, and the public voted to retain the amnesty provi- 
sions. As of the end of 1990, the military continued to play a very 
minor role in the national economic and political life, and officers 
were no longer seconded to serve in the civilian administration. 



A guard stands at a monument 
to General Artigas 
in preparation for a 
memorial ceremony. 
Courtesy United States 
Department of Defense 



The Armed Forces in the National Life 

The armed forces continued to contribute to national develop- 
ment through civic-action programs in 1990. The army's engineers 
were heavily involved in road building, repair, and maintenance; 
bridge construction; maintenance of the internal telecommunica- 
tions network; and construction of public- works projects, such as 
schools and government buildings. The army's Military Geographic 
Service was responsible for all mapping. The navy trained and su- 
pervised the nation's merchant marine and operated navigational 
aids along inland waterways. The navy also conducted oceano- 
graphic studies, and its port facilities provided support and repair 
to Uruguay's fishing and merchant fleets. The air force controlled 
and maintained the country's airports and regulated civil aviation. 
It also transported passengers and cargo to isolated areas. 

All services provided disaster- relief assistance. The army, for 
instance, constructed emergency dams and provided transportation 
in times of special need. The air force was active in search-and- 
rescue operations, air evacuation, and airlifts of emergency sup- 
plies. The navy provided surface and air rescue operations at 
sea, and in times of flooding it provided emergency transportation. 

Manpower 

Unlike most Latin American countries, entrance into the armed 



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Uruguay: A Country Study 

forces was entirely through voluntary recruitment; there was no 
system of compulsory service. Initial enlistment was for one- or 
two-year terms, depending on the service and the assignment, and 
there was litde difficulty in filling vacancies. Recruits were attracted 
by benefits, which included early retirement with pension, and by 
the opportunity to attend armed forces schools, which provided skills 
useful in civilian occupations. Noncommissioned officers (NCOs) 
were career soldiers, sailors, or airmen who were chosen from the 
recruits toward the end of the initial period of service. The small 
size of the armed forces permitted selection of physically qualified 
applicants; in keeping with the country's high literacy rate (96 per- 
cent in 1990), recruits generally had at least a basic education (see 
Education, ch. 2). 

In 1990 over 573,000 males were fit for military service; enlist- 
ed personnel were between eighteen and forty-five years of age. 
A loosely organized reserve was made up of approximately 120,000 
former members of the armed forces. Constituting only about 0.8 
percent of the total population, the armed forces were not a drain 
on the country's work force. 

Morale in the military services was generally adequate in 1990. 
The 1 989 defeat of the referendum to overturn amnesty provisions 
for most military personnel who committed offenses during the peri- 
od of military rule appeared to quell any lingering uneasiness in 
the armed forces over the relinquishment of power. The decrease 
in personnel during the 1985-87 period drew some protest, espe- 
cially among those forced to leave service. Low levels of pay con- 
tinued to be a major morale problem, despite a number of partially 
compensating benefits. The Ministry of National Defense report- 
ed in mid-1988 that from 1973 to 1988 enlisted men's salaries lost 
34 percent of their purchasing power; officers' salaries, 44 percent; 
and auxiliary personnel's, 21.5 percent. 

Military personnel, active-duty and retired, as well as their de- 
pendents, were entitled to medical care provided by the armed forces 
medical services. Officers could retire on partial pay after twenty 
years of service and on full pay after thirty years. NCOs received 
the same benefits after fifteen and twenty years of service, respec- 
tively. Additional allowances were provided for hazardous duty. 

Military Justice 

According to the constitution of 1967, the military justice sys- 
tem had jurisdiction over military offenders who committed crimes 
during wartime; in peacetime the system had jurisdiction only over 
military personnel charged with committing military offenses. Dur- 
ing the period of military rule, civilians charged with crimes against 



214 



National Security 



the national security were tried by military courts, as were most 
offenses committed by military personnel. The role of the military 
justice system was greatly reduced because of the return to democra- 
cy, however, and since that time the Supreme Court of Justice has 
consistently held that in peacetime, jurisdictional disputes between 
the parallel civil and military court systems should be resolved in 
favor of the civil courts. Whenever the Supreme Court of Justice 
accepted a military case on appeal, the law required that two mili- 
tary judges serve on the court on an ad hoc basis. 

The Supreme Military Tribunal, which was composed of five 
members, four of whom had to be military field- grade officers, was 
the highest military appeals court for military offenders. Beneath 
it were two military judges of first instance, who had original juris- 
diction over serious offenses and appellate jurisdiction over less seri- 
ous offenses. Those who had committed less serious offenses were 
first tried by lower court judges. 

Defense Spending 

According to the latest government figures available in 1990, 
the defense budget for 1986 was N$Ur22.8 billion (for value of the 
Uruguayan new peso — see Glossary), or between US$125 million 
and US$150 million, depending on the source of information. The 
figure represented approximately 11.8 percent of total central 
government expenditures, down from the 12 percent to 15 per- 
cent levels sustained in the early 1980s. When measured in cur- 
rent pesos, military spending rose sharply during the 1979-86 
period. When factoring in inflation, however, spending rose slowly 
during the 1977-81 period, then fell approximately 20 percent over 
the 1982-86 period. 

The decline in real growth in the defense budget during the 
1982-86 period was accompanied by a dramatic depreciation of 
the peso, making the dollar value of defense spending fall by some 
62 percent over the period. This decline had a serious effect on 
military readiness by virtually precluding importation of spare parts, 
replacements, or modern equipment. Between 1977 and 1983, mili- 
tary equipment had accounted for between . 5 and 3 . 7 percent of 
total annual imports. From 1984 to 1987, the nation imported no 
military supplies. As of 1990, a frigate imported in 1988 from France 
represented the only significant purchase of military equipment after 
1983. There were unconfirmed reports in the international press, 
however, that in March 1990 the nation purchased two more frigates 
of the same class. 

When compared with other Latin American countries, the por- 
tion of the national budget devoted to defense was above average. 



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Uruguay: A Country Study 

The military's portion of the gross national product (GNP — see 
Glossary) was about 2.4 percent in 1986, in the middle range for 
Latin American nations. 

Until the late 1970s, the defense budget was augmented by large 
amounts of United States military assistance. Over the 1950-77 
period, the country received nearly US$60 million of assistance 
in the form of grants and credits from the United States. During 
the 1977-78 period, however, the nation refused further assistance 
in response to harsh criticism from the administration of President 
Jimmy Carter over the military government's human rights abuses. 
The United States resumed military assistance to Uruguay in 1987, 
after the return to civilian rule, but on a very limited level, in keep- 
ing with the overall reduction of United States security assistance 
worldwide. Aid during the 1987-90 period consisted of approxi- 
mately US$1 million in grants intended to maintain equipment 
acquired from the United States. The United States also funded 
the education of a small number of Uruguayan military personnel 
at United States military facilities under the International Mili- 
tary Education and Training (IMET) program. IMET assistance 
in United States fiscal year (FY) 1990 totaled US$124,000. The 
United States Department of Defense's FY 1991 request totaled 
US$200,000. 

Uruguay did not export any military equipment. The domestic 
defense industry was very limited in scope and produced only the 
most basic military supplies, such as small-arms ammunition, uni- 
forms, and stores. The only exception was the navy's shipyard, 
which built small patrol craft and was capable of providing dry- 
dock, overhaul, and repair support. 

Armed Forces Organization; Training, and Equipment 

Under the constitution, the president is commander in chief of 
the armed forces and exercises administrative control over the three 
services through the Ministry of National Defense. In practice, oper- 
ational control passed through the service commanders, who were 
appointed by the president. There was a nominal chief of the joint 
staff but no substantive joint staff organization. In 1990 the defense 
minister was a former law professor who had been active in the 
transition to democracy. Assistants from each of the three services 
were assigned to the minister. 

During the 1973-85 period, first the military government's Coun- 
cil of State and then the Council of the Nation passed several laws 
that limited the president's military control. Principal among these 
was the February 1974 decree that served as an organic law for the 
armed forces. Under this law, the commanders of the three services 



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National Security 



were chosen by a board of generals from each respective service. 
During the 1984-85 transition to civilian rule, the appointment 
procedure was amended so that the boards of generals chose can- 
didates from which the president then appointed service chiefs of 
staff. In 1986 the reestablished General Assembly returned the power 
of direct appointment of the service commanders to the president. 

In 1987 the General Assembly passed a new organic law for the 
armed forces establishing that the ''basic duty of the armed forces 
is to defend the honor, independence, and the peace of the repub- 
lic, its territorial integrity, its Constitution, and its laws." The law 
explicitly stated that the armed forces should always act under the 
supreme command of the president and the minister of national 
defense in keeping with constitutional measures currently 
in force. Training practices were modified to include courses for 
military cadets on the proper role of the military in a democracy. 
The length a service commander could serve was cut from eight 
to five years, and service commanders were required to retire when 
the term of service expired. As of 1990, the government and the 
armed forces appeared to be adhering to all provisions of the law. 

The Ministry of National Defense was responsible for the ad- 
ministration of military training, health, communications, and con- 
struction, and it supervised the military retirement and pension 
system. The ministry supervised the triservice Military Institute 
for Advanced Studies, which served as a national war college to 
train senior officers. Also under the ministry was the General Direc- 
torate of Defense Information (Direction General de Information 
de Defensa — DGID). As reorganized by the executive branch in 
1989, the DGID was a triservice agency that coordinated and 
planned all operations of the three separate military intelligence 
services. Traditionally, the army's intelligence branch was the most 
powerful of the military intelligence services. 

The country was divided into four military regions. Military 
Region I, headquartered at Montevideo, had responsibility for the 
national capital and the departments of Montevideo and Canelones 
(see fig. 1). Military Region II, headquartered at San Jose, included 
the departments of Colonia, Durazno, Flores, Florida, San Jose, 
and Soriano. Military Region III, headquartered at Paso de los 
Toros, comprised the departments of Artigas, Paysandu, Rio 
Negro, Rivera, Salto, and Tacuarembo. Military Region IV, head- 
quartered at Maldonado, included the departments of Cerro Largo, 
Lavalleja, Maldonado, Rocha, and Treinta y Tres. 

Uruguay had cordial foreign military relations with both Argen- 
tina and Brazil, as well as with the United States. During the 
1980s, armed forces personnel represented the nation in foreign 



217 



Uruguay: A Country Study 

peacekeeping activities in Cambodia, on the Angola-Namibia border, 
in the Sinai, and on the Iran-Iraq border. Uruguay was a member 
of the Inter- American Defense Board (IADB), which maintained 
a headquarters and staff in Washington and acted as a military 
advisory group to the Organization of American States (OAS), of 
which Uruguay was also a member. 

Uruguay had a long history of military cooperation with neigh- 
boring countries. It joined with twenty other Latin American na- 
tions and the United States in 1945 to sign the Act of Chapultepec, 
in which each agreed to consult on any aggression against a co- 
signatory. Uruguay was also a signatory to the 1947 Inter- American 
Treaty of Reciprocal Assistance (Rio Treaty), in which the Unit- 
ed States and Latin American and Caribbean countries commit- 
ted themselves to working toward the peaceful setdement of disputes 
and collective self-defense in the Americas. Uruguay also was a 
signatory to the 1967 Treaty for the Prohibition of Nuclear Weapons 
in Latin America (Tlatelolco Treaty) and the Treaty on the Non- 
Proliferation of Nuclear Weapons. Uruguay also accepted the 
Biological Weapons Convention, which prohibits the development, 
production, or stockpiling of such weapons. 

Army 

In May 1990, Lieutenant General Guillermo de Nava, the army 
commander, defined the army's mission and the role of its mem- 
bers. He stressed that "for the government and the country the 
most important action of the army is the exact compliance with 
our fundamental role that is defined in the law and which consists 
of defending the honor, the independence, and the peace of the 
Republic, the integrity of its territory, its Constitution, and its 
laws." He also maintained that the armed forces must take action 
against "all types of aggression." 

Army personnel in 1990 numbered some 17,200, a reduction 
of 22 percent from the 1983 level of 22,000. The army consisted 
of infantry, cavalry, artillery, engineer, signal, administrative, 
transport, materiel, medical, and veterinary services. The chief of 
the army staff presided over staff sections for personnel, intelligence, 
operations and instruction, logistics, and public relations. 

The army's main tactical units were organized under four corps 
headquarters that were administrative rather than operational. Each 
corps was located in one of the four military regions (each army 
corps bore the same number as the military region). The four corps 
together had one independent infantry brigade, fifteen infantry bat- 
talions, six engineer battalions, six artillery battalions, and ten 
cavalry battalions (four horsed, three mechanized, two motorized, 



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National Security 



and one armored). Each corps was responsible for at least three 
infantry battalions, one engineer battalion, and one field artillery 
battalion, as well as logistics, signals, and support units. The num- 
ber and type of cavalry battalions within each corps varied. 

The First Corps at Montevideo was traditionally the most power- 
ful of the army's main command elements. Its cavalry units in- 
cluded one horsed battalion, one mechanized battalion with scout 
cars, and one motorized battalion. The artillery command of the 
First Corps had one antiaircraft battalion in addition to its field 
artillery battalion. 

One independent infantry brigade headquarters that performed 
many of the army's administrative functions was attached to army 
headquarters at Montevideo. The brigade was responsible for one 
armored battalion, one airborne battalion, and one ranger infan- 
try battalion. Also at the army level was one motorized cavalry 
battalion that functioned as a presidential bodyguard and performed 
ceremonial duties. One engineer brigade made up of two battal- 
ions, as well as assorted logistics and support elements, completed 
the units assigned to army headquarters. 

The Second Corps was headquartered at San Jose. Under it was 
an armored cavalry battalion equipped with light tanks and armored 
personnel carriers (APCs). The Third Corps, at Paso de los Toros, 
had two horsed battalions and one mechanized cavalry battalion. 
One of its infantry battalions was equipped with APCs. The Fourth 
Corps was headquartered at Minas. Within the Fourth Corps, one 
horsed battalion and one mechanized cavalry battalion were lo- 
cated at Melo. 

Major ground force arms were relatively heterogeneous in ori- 
gin. Much was obsolete United States equipment, some acquired 
thirdhand from various foreign sources. The armor inventory in- 
cluded fifty-four light tanks, all of United States or Belgian origin 
(see table 19, Appendix). The army also had Belgian-, United 
States-, and Brazilian-made armored vehicles. APCs included Unit- 
ed States and West German models. Artillery pieces and air defense 
guns were of Swedish, Argentine, and United States manufacture. 
In general, the entire inventory was aging and in need of modern- 
ization, but economic considerations — combined with the absence 
of a significant internal or external threat — made it unlikely that 
new equipment would be ordered in the near future. 

Army officers were trained at the four-year Military Academy, 
from which they were commissioned as second lieutenants. The 
army's School of Arms and Services provided specialist training 
for recruits and officers. The Command and Staff School trained 
mid-level officers for promotion to staff or field positions. 



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Uruguay: A Country Study 
Navy 

As of 1990, naval strength stood at 4,500, which included both 
naval air personnel and marines. Personnel had been reduced from 
a high of 6,200 in 1983. The only naval base in operation was lo- 
cated at Montevideo, where facilities included a dry dock and a 
slipway. In addition to the naval staff, the navy's commander was 
assisted by the chief of forces afloat and the chiefs of naval educa- 
tion and training, naval aviation, customs, and the marine police. 

The navy was active in riverine and offshore patrol, transport, 
and sea-and-air rescue. In the late 1980s, naval vessels seized for- 
eign boats caught fishing illegally in the country's territorial waters. 
The navy also played a role in interdicting drug traffickers. 

The fleet command was divided into one escort division and one 
patrol division. The escort division operated a newly acquired 
French frigate, as well as one other frigate, one destroyer escort, 
and one corvette, all formerly in service with the United States Navy 
(see table 20, Appendix). The patrol division had three relatively 
modern French-built large patrol craft, one antiquated Italian-built 
large patrol craft, two United States-built large patrol craft (deliv- 
ered in February 1990), and two small patrol craft. The fleet also 
included one minesweeper, five amphibious landing craft, one train- 
ing vessel, and a small number of support and utility craft. An ad- 
ditional two frigates of the same class (Riviere) as that purchased 
in 1988 were contracted for in February 1990. The ships were due 
for extensive refitting, making their delivery date uncertain. 

Uruguayan Naval Aviation had 400 personnel. Operations were 
divided into combat, communications, and training elements. All 
naval aircraft were based at the naval air base at Laguna del Sauce 
in Maldonado Department. The marine detachment numbered 500 
and was organized into a single battalion. 

All naval schools were located at the Naval Training Center in 
the Montevideo port area. Naval officers underwent a five-year 
course at the Naval Academy, graduates of which were also com- 
missioned in the National Maritime Police and the merchant ma- 
rine. The senior school for naval officers was the Naval War College. 
Enlisted personnel were trained at the School of Naval Speciali- 
zation. 

The navy commanded the 1,500-strong National Maritime 
Police, which performed coast guard duties, supervised the nation's 
ports and merchant marine, and acted as a harbor police. The mar- 
itime police operated three small patrol craft and a buoy tender. 
Its personnel were trained by the navy. 



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National Security 

Air Force 

Air force strength in 1990 was 3,500, down from 4,400 in 1983. 
The air force was equipped with eighteen combat aircraft, seven 
of which were used principally as trainers (see table 21, Appen- 
dix). The air force generally operated out of bases at Paso de Men- 
doza, Carrasco, Durazno, Laguna del Sauce, Laguna Negra, and 
Punta del Este. 

The commander of the air force was assisted by a staff with sec- 
tions for personnel, intelligence, operations, and materiel. The air 
force was organized into tactical, training, and materiel commands. 
The Tactical Air Command, whose headquarters were at Carras- 
co Air Base outside of Montevideo, was responsible for the opera- 
tion of most of the service's assets. These were apportioned between 
two air brigades. The first had one fighter squadron, three trans- 
port squadrons (which were also responsible for regular civilian 
flights), and a sea-and-air rescue group at Carrasco. The second 
brigade, at Durazno Air Base, had one training squadron for fight- 
ers and one liaison unit with other aircraft. 

The Air Training Command, with one training squadron, was 
headquartered at the General Artigas Military Airport in Pando. 
It oversaw the Air Force Academy and the Military Air School at 
Pando and the Command and General Staff School at Carrasco, 
which provided advanced training for officers. The Air Technical 
School at Pando gave specialist training to officers and trained air 
force recruits. The school also trained paratroopers for the army. 
Attached to the Air Training Command were a small number of 
fixed- wing and rotary aircraft. The Air Materiel Command con- 
sisted of maintenance, supply, communications, and electronics 
elements. It also oversaw the administration and operation of mili- 
tary and civilian airfields. 

Uniforms, Ranks, and Insignia 

All three branches of the service had summer, winter, and dress 
uniforms. The army winter uniform was made of green gabardine, 
and the summer uniform was made of beige tropical worsted. For 
dress, a white blouse was worn in the summer. Navy and air force 
uniforms were similar in style and color to those of the respective 
United States forces. The blouse of the navy winter uniform was 
double breasted, and that of the summer uniform was single 
breasted. 

Officer and enlisted ranks corresponded generally to those of the 
United States Armed Forces. Army officer ranks were indicated 



221 




222 




223 



Uruguay: A Country Study 



by gold buttons and braiding on shoulder boards; piping of vari- 
ous colors indicated the branch of service. Army enlisted ranks were 
indicated by yellow chevrons. Rank insignia for officers in both 
the navy and the air force were indicated by gold bands on the 
sleeves of the winter uniform and by similar bands on the shoul- 
der boards of the summer uniform. Air force enlisted ranks were 
denoted by gray chevrons on a blue background, and navy enlist- 
ed ranks were indicated by yellow chevrons and stars on a red back- 
ground (except for the rank equivalent to master chief petty officer, 
which was designated by a narrow gold band and loop on a navy- 
blue background) (see fig. 10; fig. 11). 

Traditionally, Uruguayan governments have not awarded mili- 
tary decorations. The three branches of the armed forces, however, 
have awarded special emblems for excellence in graduation stand- 
ing at the service academies and at service schools. 

Public Order and Internal Security 

Public order was well established in the nation, and the govern- 
ment committed sufficient resources to law enforcement to main- 
tain domestic order throughout the country. Urban and rural areas 
were generally safe, as was travel throughout the nation. Citizens 
were able to conduct day-to-day affairs in peace and without govern- 
ment interference. The constitution guarantees the right to priva- 
cy and due process and freedom of the press, association, assembly, 
and religion. After the return to civilian rule in 1985, all of these 
rights were routinely respected by the government and by law en- 
forcement agencies. 

Several groups that were suppressed or banned under the peri- 
od of military rule had since emerged as active participants in the 
national political life. These included leftist political parties, stu- 
dents, and labor organizations. During the late 1980s, each of these 
groups participated in protests or demonstrations. Such actions re- 
quired government permits, which were routinely granted. Demon- 
strations by these groups were generally peaceful and free from 
government harassment. 

Disputes between political parties or between factions of the same 
party occasionally flared into violence during the late 1980s; vio- 
lence was usually minor, however, taking the form of vandalism 
or arson against party offices. In general, few injuries and little 
damage were sustained. In 1985 the government legalized all po- 
litical parties, and as of 1990 there were no known political prisoners 
or any banned or illegal political groups in the nation. 

The MLN-T, also known as the Tupamaros, was a former ur- 
ban guerrilla organization given amnesty in 1985. The MLN-T 



224 



National Security 



was established in 1962 by Raul Sendic Antonaccio, leader of a 
group of students, peasants, and intellectuals who espoused an ex- 
treme nationalist and socialist ideology. Organized according to 
a clandestine cell-based structure, the movement conducted a guer- 
rilla campaign from 1963 to 1973 that included bank robberies, 
kidnappings, sabotage, and jail breaks. The army effectively de- 
stroyed the Tupamaros in 1972, and its leaders were imprisoned 
for long terms or forced into exile (see The Military Government, 
1973-85, ch. 1). After the remaining Tupamaro prisoners were 
freed under an amnesty decree in March 1985, the MLN-T pub- 
licly renounced armed struggle and committed itself to left-wing 
parliamentary politics. In 1990 the Tupamaros constituted a mar- 
ginal political force of some several hundred members (see Politi- 
cal Parties, ch. 4). The group published a newspaper and operated 
a radio station in Montevideo. 

Student organizations, repressed during the military regime, 
reestablished themselves in 1985 when academic freedom and 
university autonomy were restored. Several professors who had been 
dismissed for ideological reasons were allowed to return to their 
positions as well. During the late 1980s, students held several pro- 
tests, none of which had a serious effect on public order (see Polit- 
ical Forces and Interest Groups, ch. 4). 

Labor unions and labor activists were also targets of repression 
under the military regime. During the late 1980s, however, labor 
activity resumed, and several labor actions and strikes took place. 
Certain of these activities caused localized disruption of day-to-day 
activities, but most grievances were solved within a short time, and 
none led to serious violence. In 1986, during a strike by the staff 
of the state-owned National Administration of Fuels, Alcohol, and 
Portland Cement (Administration Nacional de Combustibles, Al- 
cohol, y Portland — ANCAP), the military was called in to ensure 
distribution of fuel but did not act in a law enforcement capacity 
(see Labor, ch. 3). 

Local and international human rights groups operated freely in 
the nation during the late 1980s, and these groups surfaced no credi- 
ble reports of killings or disappearances. The constitution forbids 
brutal treatment of prisoners, and there were few accusations of 
torture of prisoners after 1985. The most dramatic exception took 
place in mid- 1989, when the death of a bricklayer while in police 
custody led to charges of police brutality and mistreatment. 
Although the police maintained the man hanged himself in his 
cell, controversy over the case led to the resignation of the minister 
of interior and to the conviction of a deputy police chief for mis- 
conduct. 



225 



Uruguay: A Country Study 

Human rights groups took serious exception to the 1986 law 
providing amnesty for military and police personnel charged with 
committing human rights abuses under the military government. 
According to a study by the General Assembly, some forty- six mem- 
bers of the military and police benefited from the amnesty. Hu- 
man rights groups, however, claimed that the real number was well 
over 100. Military and police officers charged with corruption or 
with financial irregularities were not covered under the amnesty. 
In 1 988 a former army general and a former minister of agricul- 
ture and fishing were charged with making illicit financial trans- 
actions during the period of military rule. 

Crime 

Official statistics on the incidence of crime during the 1980s were 
not available in 1990. In general, however, there did not appear 
to be an unusual degree of ordinary crime. Judging from reports 
in the national press, the level of crime was higher in urban areas, 
particularly in Montevideo, than in rural areas. 

Smuggling was a perennial problem for law enforcement offi- 
cials, and the borders with Argentina and Brazil were periodically 
closed during the late 1980s in an effort to control trafficking in 
contraband. In 1989 smuggling surged because of the strength of 
the Uruguayan new peso relative to Argentine and Brazilian curren- 
cies. The resulting fall in government tax revenue and legal domestic 
trade prompted the government to seal the borders once again. Resi- 
dents of the border area protested, claiming that the government 
should differentiate between small- and large-scale smuggling. 

During the late 1980s, the nation experienced problems with the 
sale and abuse of illegal narcotics and with drug trafficking. Stories 
in the domestic press covered a police raid on a cocaine laboratory 
and told of seizures of marijuana, LSD (lysergic acid diethylamide), 
and cocaine. In an effort to focus more resources on the problem, 
the government in July 1 988 announced the formation of the Na- 
tional Council for the Prevention and Repression of Illicit Traffic 
and Improper Use of Drugs. The new body was responsible for 
coordinating the nation's antidrug campaign. After the interna- 
tional press reported in 1 989 that Uruguayan gold merchants were 
involved in laundering drug money, the police began investigat- 
ing possible domestic links to international drug-trafficking organi- 
zations. 

The National Police 

The National Police were established in 1829, one year after the 
country gained its independence. At that time, each department 



226 



/ 



GORAZON 






A 1984 election campaign poster demanding amnesty for Tupamaros 
Graffito denouncing Uruguay's foreign debt and the International 
Monetary Fund, displayed during the 1984 election campaign 

Courtesy Charles Guy Gillespie 



227 



Uruguay: A Country Study 

was assigned a police chief, similar to the system in modern use. 
As of 1990, police forces numbered approximately 17,500, a ratio 
of about five police officers to each 1,000 inhabitants. At least 20 
percent of the total was assigned to the capital area, in which about 
one-half of the country's total population lived. In all, about 40 
percent of the police force was assigned to urban areas, and the 
remainder were assigned to rural settlements. 

Article 168 of the constitution gives the president, acting through 
the minister of interior, responsibility for the preservation of pub- 
lic order. Article 173 authorizes him to appoint a chief of police 
for each of the departments, whom he is authorized to remove at 
will. 

The Ministry of Interior had the responsibility for ensuring public 
safety throughout the nation, except for coastal areas and the shores 
of navigable rivers and lakes, which were the responsibility of 
the National Maritime Police, under the Uruguayan Navy. Police 
training was centralized under the administration of the min- 
istry, which oversaw the operation of the Police Training Academy. 
The academy, established in 1936, had separate schools for officers 
and cadets and for other ranks. The course for noncommissioned 
officers ran for one year, and the course for cadets ran for two years. 
The academy also offered in-service and specialty courses of vary- 
ing lengths. 

Subordinate to the Ministry of Interior, the National Police were 
organized into four operating agencies: the Montevideo Police, the 
Interior Police, the National Traffic Police, and the National Corps 
of Firemen. Each of these agencies was administratively a separate 
entity, handling most personnel administration, including recruit- 
ment, separately. 

The Montevideo Police had five administrative divisions: inves- 
tigation, security, support services, intelligence, and legal affairs. 
Operationally, they were divided into the patrol services, canine 
corps, security and traffic bureau, criminal investigation bureau, 
and antismuggling brigade. The criminal investigation bureau was 
unique in that it conducted operations nationwide, not just in the 
capital area. The Montevideo Police maintained twenty-nine police 
stations, one of which was concerned solely with urban traffic. The 
Montevideo Police also worked out of police posts in small towns 
and villages near the capital. 

The Interior Police coordinated the activities of the police forces 
maintained by each department. The National Traffic Police con- 
trolled traffic on the nation's roadways. The National Corps of Fire- 
men was a centralized fire-prevention and fire-fighting agency. 
Its personnel underwent basic training with police personnel but 



228 



Two Uruguayan marines demonstrate a search of a 

vehicle and its occupant. 
Courtesy United States Department of Defense 

followed up with specialized training and career assignments. 
Detachments of the corps were assigned to police forces in each 
department and in the city of Montevideo. 

Two police paramilitary organizations were assigned to the capital 
area. The first was the Republican Guard, which had some 500 
personnel as of 1990. This unit was organized into cavalry elements 
used for guard duty, parades, and ceremonial occasions. When 
necessary, the Republican Guard was called on for riot duty back- 
up for the regular police. The Metropolitan Guard was responsi- 
ble principally for guarding municipal property, banks, and 
embassies. As of 1990, its personnel numbered some 650. The 
Metropolitan Guard was conceived of as a paramilitary force and 
was equipped with machine guns and riot-control gear. The unit 
was also charged with helping the police control disturbances and 
acting as a ready reserve for emergencies of all types. 

The Criminal Justice System 

The constitution provides that judicial power be vested in the 
Supreme Court of Justice (see The Judiciary, ch. 4). Immediately 
below the Supreme Court of Justice are six appellate courts, in- 
cluding the appellate court on criminal matters. Its judgment is 



229 



Uruguay: A Country Study 



by unanimous decision of the three justices. The next courts below 
the appellate courts are the courts of first instance, or lawyer courts 
(juzgados letrados), the principal courts of first instance for criminal 
felony cases. In 1990 Montevideo had ten courts of first instance 
to hear criminal cases, the departments of Paysandu and Salto had 
two each, and each of the other departments had one. The lower 
justice of the peace courts hear minor cases and have original juris- 
diction over most misdemeanors. 

The nation's judicial system is based on the Napoleonic Code 
of 1804. Once a suspect is identified, the constitution requires is- 
suance of a written arrest warrant unless the suspect was caught 
during the commission of a crime. By law a suspect can be held 
incommunicado for twenty-four hours, after which he or she must 
be brought before a judge to answer charges. Judges then have 
twenty-four hours to decide whether to release or to charge the in- 
dividual. Once charges are brought, an accused has the right to 
legal counsel; a public defender is appointed to represent those ac- 
cused who cannot afford counsel. If the accused is charged with 
a crime carrying a penalty of at least two years, he or she can be 
confined during the investigation of the case. Bond is allowed in 
such cases, provided the individual is not deemed a danger to so- 
ciety or likely to flee. 

The constitution requires that all trials be held in public to the 
extent that they have to be open and give a public statement of 
the charge. According to the Code of Criminal Procedure, however, 
arguments by the prosecution and the defense are submitted to the 
judge in writing, and these written documents are not usually made 
public. The defense attorney has the right to review all written docu- 
ments submitted to the court. The constitution does not provide 
protection against self-incrimination, and at trial an accused can 
be required to answer any questions from the judge. Based on the 
written statements submitted, the judge hands down his or her de- 
cision (usually without seeing the accused parties in person); there 
is no provision for trial by jury. 

In the second half of the 1980s, several jurists and human rights 
groups suggested numerous changes to the judicial procedure to 
increase efficiency and fairness. Among the proposed reforms were 
the institution of trial by jury and tightened supervision of pretrial 
investigations, but as of 1990 none of these changes had been made. 

The principal source of the nation's criminal law was the Penal 
Code of 1889, which was amended in 1934 and contained three 
books. The first book concerned general principles of the law and 
the definition of offenses, which were divided according to gravity 
into felonies and misdemeanors. The first book also defined various 



230 



National Security 



punishments, which comprised incarceration in a penitentiary or 
prison, exile, deprivation of political rights, disqualification or sus- 
pension of professional qualifications, and fines. It also discussed 
extenuating circumstances for a defendant, such as age, intoxica- 
tion, or insanity. The second book concerned felony crimes, in- 
cluding crimes against the sovereignty of the state, the political 
order, public order, public administration, and public health. The 
remaining articles in the second book dealt with crimes against per- 
sons and property. The third book concerned misdemeanor offenses. 
In June 1989, the Penal Code was amended to provide sanctions 
against committing or inciting hatred or other forms of violence 
against persons based on race, color, religion, or national or eth- 
nic origin. 

In addition to the Penal Code, several other statutes covered 
criminal offenses. Drug legislation was covered in a 1974 law that 
regulated the commercial sale and use of controlled substances and 
penalized drug abuse and drug trafficking. Juvenile offenders were 
treated under a 1934 code for minors that established a juvenile 
court in Montevideo with jurisdiction over persons under the age 
of eighteen; in 1990 there were four such courts in Montevideo. 

The Ministry of Interior supervised the federal prisons and 
departmental jails. All nineteen departments maintained jails in 
which accused persons were temporarily housed pending trial and 
sentencing. All prisoners sentenced to confinement were held in 
one of three federal prisons or at the work colony at San Jose. Two 
of the federal prisons were for men, and the third was for women. 
The work colony was designed to aid in the rehabilitation of 
prisoners for whom agricultural work was believed to be helpful. 

Although the three federal prisons existed independendy of each 
other, a single entity in the ministry administered them. A 
prerelease facility housed prisoners about to complete their term 
of imprisonment. These individuals could bring their families to 
live with them until their final discharge. The prisoners themselves 
were in charge of the facility under the guidance of trained instruc- 
tors. The prison area was surrounded by a wide moat. The 
prerelease facility was outside the moat. Visits to minimum secu- 
rity inmates took place in the open; medium security inmates were 
separated from visitors by a glass partition; and those in maximum 
security were separated by reinforced glass partitions, with tele- 
phones for communication. 

The Penal Code provided that inmates of minimum security in- 
stitutions could be employed in such activities as road building, 
quarrying, and similar public improvement projects. The obliga- 
tion to work was established by law, and work was mandatory for 



231 



Uruguay: A Country Study 

prisoners who had not been tried. Prisoners earned small amounts 
for their labor; these sums were paid upon release. Prison labor 
was aimed at rehabilitating the individual, a principle no doubt 
derived from the country's tradition of extensive social services. 

* * * 

As of late 1990, no definitive studies dealing comprehensively 
with national security matters in contemporary Uruguay had been 
published. A general treatment of modern Uruguayan political life, 
touching on the military and its place in the national life, can be 
found in Martin Weinstein's Uruguay: Democracy at the Crossroads. 
The most complete coverage of the history and development of the 
armed forces is contained in the section "Uruguay" in Adrian J. 
English's Regional Defence Profile, No. 1 : Latin America. For develop- 
ment of the armed forces since 1980, the reader must search through 
issues of the Latin American Weekly Report, the Latin America Report 
produced by the Joint Publications Research Service, and the Daily 
Report: Latin America put out by the Foreign Broadcast Informa- 
tion Service. Current order-of-battle information is available in the 
International Institute of Strategic Studies' excellent annual, The 
Military Balance. The best overview of conditions of public order 
is contained in the sections on Uruguay in Country Reports on Hu- 
man Rights Practices, a report submitted annually by the United States 
Department of State to the United States Congress. (For further 
information and complete citations, see Bibliography.) 



232 



Appendix 



Table 

1 Metric Conversion Coefficients and Factors 

2 Population Size and Density by Department, 1985 Census 

3 Ranking of Departments by Level of Development, 1978 

4 Population, Selected Years, 1769-2020 

5 Income Distribution by Area, 1986 

6 Decline of Real Wages, 1968-82 

7 Evolution of Real Wages, 1981-89 

8 Decline of Real Minimum Wage, 1981-89 

9 Key Economic Indicators, 1985-89 

10 Public-Sector Finances, 1983-87 

11 Public-Sector Expenditures, Selected Years, 1980-87 

12 Public-Sector Revenues, 1980, 1984, and 1986 

13 Agricultural and Fisheries Production, 1983-88 

14 Selected Autonomous Entities, 1990 

15 Manufacturing Production and Employment by Sector, 1987 

16 Balance of Payments, 1984-88 

17 Principal Political Parties, Factions, and Candidates, Elections 

of November 26, 1989 

18 Principal Newspapers, 1990 

19 Major Army Equipment, 1990 

20 Major Navy Equipment, 1990 

21 Major Air Force Equipment, 1990 



233 



Appendix 



1 CL0L6 1 . 


Metric Conversion Coefficients and Factors 


When you know 


Multiply by 


To find 




0.04 


inches 




0.39 


inches 




3.3 


feet 






miles 


Hectares (1U,UUU nr) . 


2.47 


acres 




0.39 


square miles 






cubic feet 






gallons 




2.2 


pounds 




0.98 


long tons 




1.1 


short tons 




2,204 


pounds 




9 


degrees Fahrenheit 


(Centigrade) 


divide by 5 






and add 32 





Table 2. Population Size and Density by 
Department, 1985 Census 



Department Population Density * 



Artigas 69,145 5.8 

Canelones 364,248 80.3 

Cerro Largo 78,416 5.7 

Colonia 112,717 18.5 

Durazno 55,077 4.7 

Flores 24,739 4.8 

Florida 66,474 6.4 

Lavalleja 61,466 6.1 

Maldonado 94,314 19.7 

Montevideo 1,311,976 2,475.4 

Paysandu 103,763 7.5 

Rio Negro 48,644 5.2 

Rivera 89,475 9.5 

Rocha 66,601 6.3 

Salto 108,487 7.7 

San Jose 89,893 18.0 

Soriano 79,439 8.8 

Tacuarembo 83,498 5.4 

Treinta y Tres 46,869 4.9 

URUGUAY 2,955,241 16.9 



* Persons per square kilometer. 

Source: Based on information from Uruguay, Direccion General de Estadfstica y Censos, 
Anuario estadistico, 1988, Montevideo, 1989. 



235 



Uruguay: A Country Study 

Table 3. Ranking of Departments by Level 
of Development, 1978 



Index of Social and 

Rank Department Economic Development 



1 Montevideo 97.7 

2 Maldonado 66.1 

3 Colonia 37.6 

4 Paysandu 34.0 

5 Lavalleja 30.1 

6 Soriano 24.9 

7 Flores 24.1 

8 Salto 22.6 

9 Canelones 22.1 

10 Rocha 19.2 

11 Florida 18.6 

12 Durazno 17.9 

13 Rio Negro 16.4 

14 San Jose 15.7 

15 Treinta y Tres 14.6 

16 Artigas 12.2 

17 Cerro Largo 10.9 

18 Tacuarembo 10.2 

19 Rivera 5.7 



Source: Based on information from Danilo Veiga, "Tipologia departmental y desarrollo 
regional en el Uruguay," Montevideo, 1978, 43. 



Table 4. Population, Selected Years, 1769-2020 * 

Year Population Year Population 

1769 12,000 1941 2,186,000 

1796 46,000 1950 2,193,000 

1829 74,000 1963 2,596,000 

1835 128,000 1975 2,788,000 

1852 132,000 1980 2,908,000 

1860 223,000 1985 2,955,000 

1872 420,000 1988 3,081,000 

1889 712,000 1995 3,152,000 

1908 1,043,000 2000 3,264,000 

1916 1,294,000 2020 3,679,000 

1930 1,699,000 

• Figures for 1852, 1860, 1908, 1963, 1975, and 1985 are census results; figures for other years to 1988 
are estimates; figures for 1995, 2000, and 2020 are projections. All figures are rounded off to the 
nearest thousand. 



236 



Appendix 



Table 5. Income Distribution by Area, 1986 



Percentage Share of Household Income 
Lowest Highest Highest 

Area 20 Percent 20 Percent 10 Percent 



Montevideo 5.5 47.3 29.9 

Department capitals 6.2 45.9 29.1 

Rest of interior 5.7 46.4 29.8 



Source: Based on information from Pablo Martinez Bengochea and Alicia Mel gar, "Evolu- 
tion de precios e ingresos, 1985-1986," Cuadernos del CLAEH [Montevideo], 11, 
No. 39, 1986, 88. 



Table 6. Decline of Real Wages, 1968-82 
(1968= 100) 



Private Public 



Year Sector Sector Uruguay 



1968 100 100 100 

1969 Ill 112 111 

1970 Ill 109 110 

1971 116 115 116 

1972 98 94 96 

1973 96 93 94 

1974 96 91 93 

1975 88 82 85 

1976 81 79 80 

1977 71 71 71 

1978 68 68 68 

1979 62 64 63 

1980 58 67 62 

1981 62 72 67 

1982 62 72 67 



Source: Based on information from Martin Weinstein, Uruguay: Democracy at the Crossroads, 
Boulder, Colorado, 1988, 69. 

Table 7. Evolution of Real Wages, 1981-89 
(fourth quarter 1984= 100) 

Private Public 



Year Sector Sector Uruguay 



1981 131 149 140 

1982 130 149 140 

1983 104 117 111 

1984 99 102 100 

1985 114 116 115 

1986 123 122 122 

1987 133 122 128 

1988 136 123 130 

1989 138 119 130 



Source: Based on information from Busqueda [Montevideo], No. 540, June 14-20, 1990, 29. 



237 



Uruguay: A Country Study 

Table 8. Decline of Real Minimum Wage, 1981-89 

Year Index * 

1981 97 

1982 99 

1983 85 

1984 85 

1985 89 

1986 84 

1987 86 

1988 80 

1989 74 

* March 1973 = 100. 

Source: Based on information from Busqueda [Montevideo], No. 539, June 7-13, 1990, 27. 



Table 9. Key Economic Indicators, 1985-89 





1985 


1986 


1987 


1988 


1989 1 


Gross domestic product (GDP) 2 ... 


. . . . 5,204 


6,382 


7,734 


7,944 


8,800 


Real GDP growth 3 


. . . . 0.3 


6.6 


4.9 


0.5 


1.5 




1.3 


1.3 


1.3 


1.3 


1.3 




13 


11 


9 


9 


9 




72 


71 


57 


69 


85 




. . . . 101 


152 


227 


359 


606 




. , , . 4,900 


5,238 


5,888 


6,330 


6,700 



1 Preliminary. 

2 In millions of United States dollars. 

3 In percentages; real GDP growth takes inflation into account. 

4 In millions. 

5 In percentages. 

6 In Uruguayan new pesos (for value of the Uruguayan new peso — see Glossary) to United States dollars. 



238 



Appendix 



Table 10. Public-Sector Finances, 1983-87 
(in millions of Uruguayan new pesos) * 





1983 


1984 


1985 


1986 


1987 


Revenues 












Taxes 












Income ■ 


3,339 


3,599 


8,616 


18,086 


30,706 


Prnnprtv 


1 951 


1 854 


4 414 


9 829 


19 218 


(~Xc\c\c\ c anH ?prvirp<i 


15 718 


24 037 


48 750 


95 781 


163 145 




3 851 


6 129 


8 936 


15 937 


32 927 


Payroll 


222 


241 


784 


1 368 


2 21Q 


Total taypc 


25 081 


3^ 860 


71 500 


141 001 


248 215 




4 204 


3 937 


5 197 


8 850 


22 724 




. . 29,285 


39,797 


76,697 


149,851 


270,939 


Expenditures 














. . 4,777 


6,675 


12,001 


23,724 


41,590 




, . . 5,345 


7,238 


11,415 


19,049 


29,538 




. . 3,108 


4,090 


7,689 


16,261 


32,037 




, . . 2,001 


2,384 


4,824 


10,782 


18,132 




. . 13,992 


17,485 


28,735 


44,530 


83,399 


Other 


, . . 7,632 


17,601 


26,761 


46,824 


88,292 


Total expenditures . . . 


. . 36,855 


55,473 


91,425 


161,170 


292,988 


Deficit 


. . 7,570 


15,676 


14,728 


11,319 


22,049 



* For value of the Uruguayan new peso — see Glossary. 



Source: Based on information from Uruguay, Direction General de Estadfstica y Censos, 
Anuario estadistico, 1988, Montevideo, 1989. 



Table 11. Public-Sector Expenditures, 
Selected Years, 1980-87 
(in percentages) 



Expenditures 


1980 


1984 


1986 


1987 




, . 9.6 


5.7 


6.3 


10.6 




. . 5.3 


12.2 


6.7 


8.0 


Financial investment and net lending . , 


, . 2.5 


3.1 


2.6 


n.a. 




, . 2.2 


9.5 


10.4 


8.9 




. . 80.4 


69.5 


74.0 


72.5 


TOTAL 


. 100.0 


100.0 


100.0 


100.0 



n.a. — not available. 

Source: Based on information from Inter- American Development Bank, Economic and Social 
Progress in Latin America, Washington, 1989, 481-84. 



239 



Uruguay: A Country Study 



Table 12. Public-Sector Revenues, 1980, 1984, and 1986 
(in percentages) 



Revenues 


1980 


1984 


1 you 


Taxes 










14.9 


9.4 


15.3 




4.9 


4.5 


5.8 




58.4 


58.2 


59.9 




12.8 


17.4 


16.4 




91.0 


89.5 


97.4 




9.0 


10.5 


2.6 


TOTAL 


100.0 


100.0 


100.0 



Source: Based on information from Inter- American Development Bank, Economic and Social 
Progress in Latin America, Washington, 1989, 477-80. 



Table 13. Agricultural and Fisheries Production, 1983-88 
(in thousands of tons) 

Product 1983 1984 1985 1986 1987 1988 
Livestock products 

Beef and veal 431 302 323 330 255 301 

Mutton and lamb 60 41 44 83 54 n.a. 

Milk 571 521 595 640 635 n.a. 

Wool 82 _82 71 87 90 89 

Total livestock products 1,144 946 1,033 1,140 1,034 390 

Crops 

Rice 323 339 421 394 335 381 

Wheat 363 419 349 246 232 414 

Corn 104 112 108 103 104 118 

Barley 45 80 113 80 62 124 

Soybeans 12 _U_ 21 35 63 n.a. 

Total crops 847 961 1,012 858 796 931 

Fisheries 

Argentine hake 80 65 97 86 84 n.a. 

Atlantic croaker 25 24 19 24 28 n.a. 

Striped weakfish 9 11 7 13 11 n.a. 

Other 30 _34 15 18 _15 n.a. 

Total fisheries 144 134 138 141 138 n.a. 

n.a. — not available. 

Source: Based on information from Uruguay, Direction General de Estadfstica y Censos, 

Anuario esladistico, 1988, Montevideo, 1989. 



240 



Appendix 



Table 14. Selected Autonomous Entities, 1990 



Acronym Organization 



AFE Administracion de los Ferrocarriles del Estado 

(State Railways Administration) 

ANCAP Administracion Nacional de Combustibles, Alcohol, y 

Portland 

(National Administration of Fuels, Alcohol, and Portland 
Cement) 

ANDEBU Asociaci6n Nacional de Broadcasters Uruguayos 

(National Association of Uruguayan Broadcasters) 

ANEP Asociacion Nacional de Empleados Publicos 

(National Association of Public Employees) 

ANP Administracion Nacional de Puertos 

(National Administration of Ports) 

ANTEL Administracion Nacional de Telecomunicaciones 

(National Telecommunications Administration) 

BPS Banco de Prevision Social 

(Social Welfare Bank) 

BROU Banco de la Republica Oriental del Uruguay 

(Bank of Uruguay) 

COCAP Consejo de Capacitacion Profesional 

(Professional Training Council) 

CONADI Comisi6n Nacional de Informatica 

(National Informatics Commission) 

INC Institute Nacional de Colonizacion 

(National Land Setdement Institute) 

OSE Administraci6n de Obras Sanitarias del Estado 

(State Sanitary Works Administration) 

PLUNA Primeras Lmeas Uruguayas de Navegaci6n Aerea 

(Uruguayan National Airlines) 

SODRE Servicio Oficial de Difusion Radiotelevision y Espectaculos 

(Official Radio and Television Service) 

TAMU Transportes Aereos Militares Uruguayos 

(Uruguayan Military Air Transport) 

UTE Administracion Nacional de Usinas y Transmisiones Electricas 

(National Administration for the Generation and Transmis- 
sion of Electricity) 



241 



Uruguay: A Country Study 



Table 15. Manufacturing Production and 
Employment by Sector, 1987 



Sector Value 1 Employment 2 







41 


Textiles apparel and footwear 


891 


37 




493 


2 




400 


9 


Transportation goods 


259 


3 




158 


7 




150 


4 




139 


5 


Tobacco products 


105 


1 




97 


3 




81 


4 


Other 


281 


16 


TOTAL 


4,350 


132 



1 In millions of United States dollars. 

2 In thousands. 



Source: Based on information from Uruguay, Direccion General de Estadfstica y Censos, 
Anuario estadistico, 1988, Montevideo, 1989. 



Table 16. Balance of Payments, 1984-88 
(in millions of United States dollars) 



1984 1985 1986 1987 1988 



Current account 

Merchandise exports 925 854 1,088 1,182 1,404 

Merchandise imports ^732 ^675 -814 -1,080 -1,112 

Trade balance 193 179 274 102 292 

Net other goods and services -332 -309 -231 -242 -280 

Net transfers 10 11 25 8 21 

Current account balance -129 -119 68 -132 33 

Capital account 

Direct investment 3 -8 -5 5 -2 

Portfolio investment 19 97 86 13 37 

Other long-term capital 20 -29 55 22 -100 

Other short-term capital _124 -134 -156 199 204 

Capital account balance 166 -74 -20 239 139 

Net errors and omissions -121 259 240 -68 -209 

Counterpart items 22 -23 -38 -49 19 

Exceptional financing 40 40 

Other liabilities -1 4 15 

Change in reserves 63 -43 -250 -34 -37 

(- means increase) 

Source: Based on information from International Monetary Fund, International Financial Statis- 
tics, Washington, 1990, 552. 



242 



Appendix 



Table 17. Principal Political Parties, Factions, and 
Candidates, Elections of November 26, 1989 



Party 



Faction 



Candidate 



Colorado Party 
(Partido Colorado) 



United Badlism (Badlismo 
Unido— BU) (right-of-center) 

Colorado and Batllist Union 
(Union Colorada y Batllista — 
UCB) (right-of-center) 



Senator Jorge 
Batlle Ibaftez 

Jorge Pacheco Areco 



Social Action Movement 
(Movimiento de Accion 
Social — MAS) (left-of-center) 



Hugo Fernandez 
Faingold 



National Party 

(Partido Nacional) 



Herrerist Movement 

(Movimiento Herrerista) (right- 
of-center) 



Senator Luis Alberto 
Lacalle de Herrera 



La Rocha National Movement 
(Movimiento Nacional de La 
Rocha— MNR) (left-of-center) 



Senator Carlos Julio 
Pereyra 



For the Fatherland (Por la 
Patria— PLP) (centrist) 



Senator Alberto Saenz 
de Zumaran 



Broad Front 

(Frente Amplio) 



Left-of-center coalition of 

communist and socialist parties, 
Tupamaros, and eleven other 
small parties 



General (Retired) Liber 
Seregni Mosquera 



New Sector 

(Nuevo Espacio) 



Integration Movement 
(Movimiento de Integracion — 
MI) coalition (left-of-center) * 



Senator Hugo Batalla 



Coalition consisted of Christian Democratic Party (Partido Democrata Cristiano — PDC), Civic Union 
(Union Cfvica — UC), and People's Government Party (Partido por el Gobierno del Pueblo — PGP). 



243 



Uruguay: A Country Study 

Table 18. Principal Newspapers, 1990 



Circulation Date 

Newspaper and Frequency Affiliation Established 

ElDta 100,000, daily; Colorado 1886 

150,000, Sunday 

El Diario 80,000, evening Independent Colorado 1923 

Diario Oficial Morning Official gazette n.a. 

Gaceta Comercial 4,500, morning Independent leftist 1916 

weekly 

La Hora Morning Broad Front 1984 

La Mariana 40,000, morning Independent Colorado 1917 

Mundocolor 4,500, evening n.a. 1976 

La Opinion Weekly UCB 1 1985 

El Pais 130,000 Conservative Blanco 1918 

La Razon Weekly MNR 2 1987 

Ultimas Noticias 19,000, evening Moon Unification Church 1981 

n.a. — not available. 



1 Union Colorada y Batllista (Colorado and Battlist Union). 

2 Movimiento Nacional de La Rocha (La Rocha National Movement). 



244 



Appendix 



Table 19. Major Army Equipment, 1990 



Type and Description 



Country of Origin 



In Inventory 



Tanks 

M-24 Chaffee light tanks United States 

M-41A1 Bulldog light tanks Belgium (United 

States-made) 

Scorpion light tanks Belgium 

Armored vehicles 

M-3A1 White armored cars United States 

FN-4-RM-62 armored cars Belgium 

Ml 13 armored personnel carriers United States 

Condor armored personnel carriers West Germany 

EE-3 Jararaca armored reconnaissance 

vehicles Brazil 

EE-9 Cascavel armored reconnaissance 

vehicles -do- 
Artillery 

FAL 7.62mm assault rifles Argentina 

Bofors M-1902 75mm, towed Argentina 

(Swedish-made) 

M-101A1 105mm howitzers South Korea (United 

States-made) 

M-114A1 155mm, towed -do- 

M-l 81mm mortars United States 

107mm mortars -do- 

M-18 57mm recoilless rifles -do- 

M-40A1 106mm recoilless rifles -do- 
Antitank weapons 

Milan 106mm antitank guns -do- 



17 

22 

15 (more 
on order) 



28 
22 
15 
50 

18 

15 



25 
5 

40 
5 

30 

10 



10 



Air defense weapons 

M-167 Vulcan 20mm air defense guns . . . South Korea (United 

States-made) 

Bofors L/60 40mm air defense guns Sweden 



n.a. — not available. 



245 



Uruguay: A Country Study 



Table 20. Major Navy Equipment, 1990 



Type and Description 



Country of Origin 



In Inventory 



Escorts 

Commandant Riviere-class frigate France 

Dealey-class frigate United States 

Cannon-class destroyer escort 1 -do- 

Auk-class corvette -do- 
Patrol craft 

Vigilante-class large patrol craft France 

Salto-class large patrol craft Italy 

Large patrol craft United States 

Small patrol craft n.a. 

Miscellaneous 

Adjutant-class minesweeper United States 

LCM 6 landing craft -do- 

LD-43-class landing craft Uruguay 

Tanker 2 Japan 

Training ship Spain 

Cohoe-class salvage vessel United States 

Transport vessel 2 Denmark 

Naval aircraft 

Grumman SA 2A/G Trackers United States 

Beech Super King Air 200T -do- 

T-28 Frennecs armed trainers Argentina 

Beech T-34 B/C United States 

Beech TC-45 -do- 
Bell 47 helicopter -do- 
Bell 222 helicopter -do- 

CASA C-2 12-200 Aviocar Spain 

Sikorsky SH-34 helicopters United States 

Piper PA- 18 Super Cub trainers -do- 

SN-7 trainers -do- 

n.a. — not available. 

1 To be replaced by Commandant Riviere-class frigates on order. 

2 Under civilian charter. 



1 

(2 on order) 
1 
1 
1 



246 



Appendix 



Table 21. Major Air Force Equipment, 1990 



Type and Description 



Country of Origin 



In Inventory 



Training 

North American AT-6A Texan United States 

Beech T-34A/B Mentor and T-6 -do- 
Cessna T-41D Mescalero -do- 
Light attack 

FMA IA-58B Pucaras Argentina 

Cessna A-37B Dragonflies United States 

Lockheed AT-33 Shooting Stars -do- 
Liaison 

Cessna U-17A Skywagon -do- 
Cessna 182 -do- 
Cessna 310 -do- 
Piper PA- 18 Super Cub -do- 
Piper PA-23 -do- 
Beech Queen Air 80 -do- 
Transports 

CASA C-212 Aviocar Spain 

Embraer EMB-110 Brazil 

Fokker F-27 Netherlands 

Fairchild-Hiller FH-227 United States 

Douglas C-47 -do- 
Survey 

Embraer EMB- 11 OBI Brazil 

Commander 680 United States 

Helicopters 

Bell 212 -do- 
Bell UH-1B -do- 
Bell UH-1H -do- 

HillerUH-23F -do- 



7 
24 
6 



247 



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Uruguay. Direccion General de Estadfstica y Censos. Anuario es- 

tadistico, 1988. Montevideo: 1989. 
Ministerio de Economfa y Finanzas. Uruguay: Un retrato 

economico. Montevideo: 1988. 

. Presidencia de la Republica. Cuatro anos de democracia. (Serie 

informe del poder ejecutivo a la Asamblea General.) Montevideo: 

1989. 

"Uruguay Sets a Fragile Example," Economist [London], 308, No. 
7569, September 24, 1988, 96. 

Wilkie, James, and Enrique Ochoa. Statistical Abstract of Latin Ameri- 
ca, 27. Los Angeles: Latin American Center, University of 
California at Los Angeles, 1989. 

Williman, Jose Claudio. Historia economica del Uruguay. Montevideo: 
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World Bank. World Debt Tables. (External Debt of Developing Coun- 
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266 



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World Radio TV Handbook. (Ed., Andrew Sennitt.) Hvidovre, 
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(Various issues of the following periodicals were also used in the 
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Science Monitor, November 1989; Euromoney [London], March 1989; 
Guia financiera [Montevideo], February-March 1989; Latin Ameri- 
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Los Angeles Times, April 1989; and New York Times, November 1989.) 

Chapter 4 

Alisky, Marvin. Uruguay: A Contemporary Survey. New York: Prae- 
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Blaustein, Albert P., and Gisbert H. Flanz. Constitutions of the Coun- 
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Bronstein, Arturo S. "The Evolution of Labour Relations in Uru- 
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Bruschera, Oscar, Evolucion institucional del Uruguay en el siglo XX. 
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Day, Alan J. (ed.). Political Parties of the World. Chicago: St. James 
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Europa World Year Book, 1989. London: Europa, 1989. 

Finch, M.H.J. "Democratisation in Uruguay," Third World Quar- 
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Finch, M.H.J. , and Alicia Casas de Barran (comps.). Uruguay, 102. 
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Fitzgibbon, Russell H. Uruguay: Portrait of a Democracy. New York: 
Russell and Russell, 1966. 

Gillespie, Charles Guy. "Democratic Consolidation in the Southern 
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Negotiating Democracy: Politicians and Generals in Uruguay. 

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267 



Uruguay: A Country Study 

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Gonzalez, Luis Eduardo. ''Political Structures and the Prospects 
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"Uruguay, 1980-1981: An Unexpected Opening," Lat- 
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Hobday, Charles. Communist and Marxist Parties of the World. (Kees- 
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Instituto de Comunicacion y Desarrollo. Mass media: Laguta. Mon- 
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Kaufman, Edy. Uruguay in Transition. New Brunswick, New Jer- 
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Khachaturov, K. "Soviet-Uruguayan Relations: Yesterday and 
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Kurian, George Thomas. Encyclopedia of the Third World, 3. (3d ed.) 
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"The Legal System of Uruguay." Pages 237-56 in Kenneth Robert 
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Lindahl, Goran G. Uruguay's New Path: A Study in Politics During 
the First Colegiado, 1919-33. Stockholm: Broderna Lagerstrom, 
1962. 

McDonald, Ronald H. "Confrontation and Transition in Uru- 
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"The Dilemma of Normalcy in Uruguay, ' ' Current Histo- 
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_. "Legislative Politics in Uruguay: A Preliminary State- 
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. ' 'The Struggle for Normalcy in Uruguay, ' ' Current History, 
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McDonald, Ronald H., and J. Mark Ruhl. Party Politics and Elec- 
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Mieres, Pablo. "Un sistema de partidos en transition: Notas 
preliminares a proposito de los resultados de las elecciones na- 
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Pendle, George. Uruguay: South America's First Welfare State. (3ded.) 
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Connecticut: Greenwood Press, 1985. 



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Porzecanski, Arturo C. "Authoritarian Uruguay," Current History, 
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Quagliotti de Bellis, Bernardo. "El Uruguay internacional: Resefia 
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Rama, German W. La democracia en Uruguay: Una perspectiva de in- 
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Sanders, Thomas G. Uruguay's Return to Democracy. (Universities 
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Uruguay. Presidencia de la Republica. Oficina Nacional del Ser- 
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Weinstein, Martin. "Consolidating Democracy in Uruguay: The 
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Uruguay: Democracy at the Crossroads. Boulder, Colorado: 

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Uruguay: The Politics of Failure. Westport, Connecticut: 

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Weschler, Lawrence. "The Great Exception, I-Liberty," New York- 
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269 



Uruguay: A Country Study 



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ton Post, 1989-90.) 



Chapter 5 

Andrade, John. World Police and Paramilitary Forces. New York: Stock- 
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Blaustein, Albert P., and Gisbert H. Flanz. Constitutions of the Coun- 
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Copley, Gregory R. Defense and Foreign Affairs Handbook. Washing- 
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Couhat, Jean Labayle (ed.). Combat Fleets of the World, 1988-89. 
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Day, Alan J. (ed.). Political Parties of the World. Chicago: St. James 
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DMS-Market Intelligence Reports: Foreign Military Markets — Latin America 
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English, Adrian J. "Uruguay." Pages 421-40 in Adrian J. En- 
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"Uruguay." Pages 262-71 in Adrian J. English (ed.), 

Regional Defence Profile, No. 1: Latin America. London: Jane's, 1988. 

Gonzalez, LuisE. "Uruguay, 1980-1981: An Unexpected Open- 
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Hobday, Charles. Communist and Marxist Parties of the World. (Kees- 
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Hoskey, James L. (ed.). Lambert's Worldwide Directory of Defense 
Authorities with International Defense Organizations and Treaties. 
Washington: Lambert, 1983. 

Ingleton, Roy D. Police of the World. New York: Scribner's, 1979. 

International Monetary Fund. Government Finance Statistics Yearbook, 
1988. Washington: 1988. 

International Financial Statistics Yearbook, 1989. Washington: 

1989. 



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Keegan, John (ed.). World Armies. New York: Facts on File, 1984. 
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Lindahl, Goran G. Uruguay's New Path: A Study in Politics During 

the First Colegiado, 1919-33. Stockholm: Broderna Lager strom, 

1962. 

The Military Balance, 1982-1983. London: International Institute 

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Pendle, George. Uruguay. (3d ed.) London: Oxford University 

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Porzecanski, Arturo G. Uruguay's Tupamaros: The Urban Guerrilla. 
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Rama, German W. La democracia en Uruguay: Una perspectiva de in- 
terpretation. Buenos Aires: Grupo Editor Latinoamericano, 1987. 

Sivard, Ruth Leger. World Military and Social Expenditures, 1989. 
Leesburg, Virginia: World Priorities, 1989. 

Stockholm International Peace Research Institute. SIPRI Yearbook, 
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United States. Arms Control and Disarmament Agency. World Mili- 
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Department of State. Country Reports on Human Rights Prac- 
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Department of State. Country Reports on Human Rights Prac- 
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271 



Uruguay: A Country Study 



Department of State. Country Reports on Human Rights Prac- 
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2d Session, House of Representatives, Committee on Foreign 
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Uruguay. Codigo del proceso penal de la Republica Oriental del Uruguay. 
Montevideo: Fundacion de Cultura Universitaria, 1985. 

Codigo penal de la Republica Oriental del Uruguay. Montevideo: 

Fundacion de Cultura Universitaria, 1986. 

Constitution de la Republica del Uruguay y actas institucionales 

vigentes. Montevideo: Corporation Grafica, 1980. 

Vanger, Milton I. The Model Country: Jose Batlley Ordonez of Uru- 
guay, 1907-1915. Hanover, New Hampshire: University Press 
of New England, 1980. 

Weinstein, Martin. Uruguay: Democracy at the Crossroads. Boulder, 
Colorado: Westview Press, 1988. 

Uruguay: The Politics of Failure. Westport, Connecticut: 

Greenwood Press, 1975. 

Willis, Jean L. Historical Dictionary of Uruguay. Metuchen, New Jer- 
sey: Scarecrow Press, 1974. 

Wilson, Carlos. The Tupamaros: The Unmentionables. Boston: Bran- 
den Press, 1974. 

Yearbook on International Communist Affairs, 1989. (Ed., Richard F. 
Staar.) Stanford, California: Hoover Institution Press, 1989. 

(Various issues of the following periodicals were also used in the 
preparation of this chapter: Foreign Broadcast Information Ser- 
vice, Daily Report: Latin America; Joint Publications Research Service, 
Latin America Report; Latin American Weekly Report [London]; Latin 
America Regional Reports: Southern Cone [London]; and Washington 
Post.) 



272 



Glossary 



ALADI (Asociacion Latinoamericana de Integration) — Latin 
American Integration Association. Headquartered in Mon- 
tevideo, ALADI was established in August 1980 to replace 
the twenty-year-old Latin American Free Trade Association 
(LAFTA). ALADI' s members included Argentina, Bolivia, 
Brazil, Chile, Colombia, Ecuador, Mexico, Paraguay, Peru, 
Uruguay, and Venezuela. Instead of uniform tariff cuts, ALADI 
advocated a regional tariff preference for goods originating in 
member states and tariffs scaled according to a member coun- 
try's level of economic development: most developed, intermedi- 
ate, or least developed. 

autonomous entities (entes autonomos) — Autonomous government 
agencies or state enterprises performing various industrial, com- 
mercial, or social services. The constitution stipulated that these 
bodies were to have a degree of autonomy or decentralization 
as established by laws enacted with the approval of an absolute 
majority of the full membership of each chamber of the Gener- 
al Assembly. They were administered by five- to seven-member 
boards of directors or directors general. Members were either 
elected by the Senate or appointed by the president with the 
consent of the Senate. The degree of autonomy or decentrali- 
zation varied. For example, the constitution stipulated that 
postal, customs, port authority, and public health services were 
not to be fully decentralized, but rather granted only as much 
autonomy as was compatible with control by the executive. The 
autonomous agencies could be divided into two general clas- 
sifications: the first was concerned with education, welfare, and 
culture; the second, with industry and commerce. In the first 
classification, autonomous agencies supervised the University 
of the Republic and the councils for secondary and elementary 
education, as well as the training for teachers. Others were con- 
cerned with radio, television, the theater, housing, welfare, and 
social security. In the second classification, agencies supervised 
the waterworks, fishing industry, ports, national merchant ma- 
rine, and production of petroleum products, cement, alcoholic 
beverages, and electric power. In the commercial field, autono- 
mous agencies supervised the Central Bank of Uruguay, the So- 
cial Welfare Bank, the State Insurance Bank, and the Mortgage 
Bank. 



273 



Uruguay: A Country Study 



A three-fifths vote of the full membership of both chambers 
of the General Assembly was required for the passage of a law 
to allow the admission of private capital in the organization 
or expansion of the assets of any of the autonomous entities, 
and the contribution of private capital, if allowed, was never 
to be greater than that of the national government. The state 
could also participate in the industrial, agricultural, or com- 
mercial activities of enterprises formed by workers' coopera- 
tives, if it had the consent of the enterprise. The autonomous 
entities could not conduct any business not specifically assigned 
to them by law, nor could they expend any of their resources 
for purposes foreign to their usual activities, 
consumer price index (CPI) — A statistical measure of sustained 
change in the price level weighted according to spending 
patterns. 

Enterprise for the Americas Initiative — A plan announced by Presi- 
dent George H.W. Bush on June 27, 1990, calling for the Unit- 
ed States to negotiate agreements with selected Latin American 
countries to reduce their official debt to the United States and 
make funds available through this restructuring for environ- 
mental programs; to stimulate private investment; and to take 
steps to promote extensive trade liberalization with the goal 
of establishing free trade throughout the Western Hemisphere. 

fiscal year — Same as calendar year. 

GATT (General Agreement on Tariffs and Trade) — An inter- 
governmental agency related to the United Nations and head- 
quartered in Geneva, GATT was established in 1948 as a 
multilateral treaty with the aim of liberalizing and stabilizing 
world trade. GATT's fundamental principles included non- 
discriminatory trade among members, protection of domestic 
trade through the customs tariff, and agreement on tariff lev- 
els through negotiations among the contracting parties. The 
Uruguay Round of major multilateral trade negotiations, the 
eighth such round of negotiations, began at Punta del Este in 
September 1986. 

GDP (gross domestic product) — A measure of the total value of 
goods and services produced by the domestic economy during 
a given period, usually one year. Obtained by adding the value 
contributed by each sector of the economy in the form of profits, 
compensation to employees, and depreciation (consumption of 
capital). The income arising from investments and possessions 
owned abroad is not included. Hence, the term domestic is used 
to distinguish GDP from GNP (q.v.). 



274 



Glossary 



GNP (gross national product) — The total market value of all final 
goods and services produced by an economy during a year. 
Obtained by adding GDP (q. v. ) and the income received from 
abroad by residents, less payments remitted abroad to non- 
residents. 

IMF (International Monetary Fund) — Established along with the 
World Bank (q.v.) in 1945, the IMF is a specialized agency 
affiliated with the United Nations that takes responsibility for 
stabilizing international exchange rates and payments. The 
main business of the IMF is the provision of loans to its mem- 
bers when they experience balance of payments difficulties. 
These loans often carry conditions that require substantial in- 
ternal economic adjustments by the recipients. 

import-substitution industrialization — An economic development 
strategy that emphasizes the growth of domestic industries, often 
by import protection using tariff and nontariff measures. Propo- 
nents favor the export of industrial goods over primary 
products. 

peso — The traditional unit of currency, first issued in 1862. 
Replaced by the Uruguayan new peso (q. v. ) in 1975 at the rate 
of 1,000 old pesos for each new peso. The term peso is often 
used as a short form to refer to the Uruguayan new peso in 
the post- 1975 era. 

terms of trade — The number of units that must be given up for 
one unit of goods by each party, e.g. , nation, to a transaction. 
The terms of trade are said to move in favor of the party that 
gives up fewer units of goods than it did previously for one unit 
of goods received and against the party that gives up more units 
of goods for one unit of goods received. In international eco- 
nomics, the concept of ''terms of trade" plays an important 
role in evaluating exchange relationships between nations. 

Uruguayan new peso (N$Ur) — The Uruguayan unit of currency, 
consisting of 100 centesimos. Often referred to in short form 
as the peso. The Uruguayan new peso was introduced in 1975 
to replace the old peso at the rate of 1 ,000 old pesos for each 
new peso. Since 1975 the exchange rate, linked to the United 
States dollar, has been frequently adjusted, with the value of 
the new peso declining. The average exchange rate per US$1 
was N$Url01 in 1985; N$Url52 in 1986; N$Ur227 in 1987; 
N$Ur359 in 1988; N$Ur606 in 1989; and N$Url,171 in 1990. 
So extreme has the devaluation of the peso been that in 1991 
Uruguayan authorities began to consider introducing another 
new peso, equal in value to 1 ,000 units of the existing new peso. 



275 



Uruguay: A Country Study 

value-added tax (VAT) — An incremental tax applied to the value 
added at each stage of the processing of a raw material or the 
production and distribution of a commodity. It is calculated 
as the difference between the product value at a given stage 
and the cost of all materials and services purchased as inputs. 
The VAT is a form of indirect taxation, and its impact on the 
ultimate consumer is the same as that of a sales tax. 

World Bank — Informal name used to designate a group of three 
affiliated international institutions: the International Bank for 
Reconstruction and Development (IBRD), the International 
Development Association (IDA), and the International Finance 
Corporation (IFC). The IBRD, established in 1945, has the 
primary purpose of providing loans to developing countries for 
productive projects. The IDA, a legally separate loan fund ad- 
ministered by the staff of the IBRD, was set up in 1960 to fur- 
nish credits to the poorest of developing countries on much 
easier terms than those of conventional IBRD loans. The IFC, 
founded in 1956, supplements the activities of the IBRD 
through loans and assistance designed specifically to encourage 
the growth of productive private enterprises in less developed 
countries. To participate in the World Bank group, member 
states must first belong to the IMF (q.v.). 



276 



Index 



abortion, 78 
Accion, 34 

Accounts Tribunal, 164-65, 170; duties 
of, 164; members of, 164-65 

acquired immune deficiency syndrome 
(AIDS), 82-83 

Act of Chapultepec, 192, 218 

Administracion Nacional de Combusti- 
bles, Alcohol, y Portland. See National 
Administration of Fuels, Alcohol, and 
Portland Cement 

Administracion Nacional de Puertos. See 
National Administration of Ports 

Administracion Nacional de Telecomu- 
nicaciones. See National Telecommuni- 
cations Administration 

Administracion Nacional de Usinas y 
Transmisiones Electricas. See Nation- 
al Administration for the Generation 
and Transmission of Electricity 

Advanced Democracy Party, 177 

Advance Grouping, 26 

AEBU. See Uruguayan Association of 
Bank Employees 

Africa: immigrants from, 65; relations 
with, 197 

agricultural: enterprises, 120; expansion, 
35, 56; exports, 124; markets, liberali- 
zation of, 44; practices, 99; reform, 10, 
24 

agricultural production, 123-25; of citrus, 
125; of corn, 124-25; decline in, 112; 
labor force in, 120; land area dedicat- 
ed to, 123; increase in, 119; methods, 
118, 124; as percentage of gross domes- 
tic product, 109, 118; stagnation in, 
118-19; subsidies, 124; of wheat, 124 

agricultural products: citrus, 125; corn, 
124-25; as inputs to manufacturing, 
118; prices, 28; rice, 124; as source of 
foreign exchange, 119; wheat, 124 

agriculture, 118-27; decline of, 97; effect 
of erosion on, 124; and industry, link 
between, 109; in interior, 56-57; labor 
force in, 115; land tenure, 120; land 
use, 119-20; in littoral, 57; and manu- 
facturing, relationship between, 118; 
under military government, 45; re- 



search and development in, 24 
Aguerrondo, Mario, 40, 41 
Aguirre Ramirez, Gonzalo, 175, 182 
AIDS. See acquired immune deficiency 

syndrome 

air force, 139, 209-10, 213, 221; aircraft 
of, 208; commands of, 221; equipment 
of, 204, 208, 209-10; mission of, 204; 
number of personnel in, 221; organi- 
zation of, 221; origins of, 209; train- 
ing, 221 

Air Force Academy, 209, 221 

Air Technical School, 221 

ALADI. See Latin American Integration 
Association 

Alfonsin, Raul, 146 

Algeria, 197 

Alliance for Progress, 39 
Allies, 192 

Alvarez Armelino, Gregorio, xxix, 46, 

158, 189 
Amezaga, Juan Jose, 32 
Amezaga administration, 33-34; civil 

liberties restored under, 33 
amnesty: for military, xxix-xxx, 179-80, 

186, 212, 226; for political prisoners, 

158, 204; for Tupamaros, 92, 158, 177, 

189, 224 

Amnesty International, xxix, 43, 179-80 

amnesty law, 179-80, 186, 212; referen- 
dum on, 180 

ANCAP. See National Administration of 
Fuels, Alcohol, and Portland Cement 

ANDEBU. See National Association of 
Uruguayan Broadcasters 

Animal Welfare Ecological Green Party 
(EE-PV), 176 

ANP. See National Administration of 
Ports 

ANR. See National Republican Asso- 
ciation 
Antarctica, 196 

ANTEL. See National Telecommunica- 
tions Administration 
Aqut, 190 
Arce, Liber, 40 
architecture, 59-60 

Argentina, xxix, 11; competition with, 



277 



Uruguay: A Country Study 



xxxiii; emigration to, 69; as export 
market, 129, 145, 146; in Great War, 
xxvi; independence from, xxvi; in- 
fluence of, 12, 14; integration with, 
197, 198; invasions by, 191; military 
relations with, 217; relations with, 192, 
195; rivalry of, with Brazil, xxvi, 3, 
191; tourists from, 140; trade with, 
xxxii, 44; in Triple Alliance, xxvi- 
xxvii, 15, 207; war against (1839-42), 
12 

Arias de Saavedra, Hernando, 6 

Arismendi, Rodney, 176 

armed forces {see also military), 42; career 
in, 210; civic action programs of, 213; 
disaster-relief assistance by, 213; doc- 
trine, xxx; history of, 204-8; insignia, 
224; number of personnel in, 203; oper- 
ational control of, 216; organic law, 
211, 216-17; president as commander 
in chief of, xxx, 161, 216; ranks, 
221-24; recruitment for, 214; reserve, 
214; service commanders, 216-17; 
training of, by United States, 192; uni- 
forms, 221 

army, 204-8, 209, 218-19; Command 
and Staff School, 219; corps of, 219; 
deployment of, 204; early, 206; equip- 
ment of, 204, 208; ground force arms, 
219; influence of, 207; intelligence, 217; 
Military Aeronautics Branch, 209; 
Military Geographic Service, 213; mis- 
sion of, 218; number of personnel in, 
218; officer training, 219; organization 
of, 204, 218-19; politicization of, 207; 
reduction of, 207-8; reorganization of, 
207-8; School of Arms and Services, 
219; size of, 207 

Army Intelligence Service, 210 

Artigas, Jose Gervasio, 3; background of, 
8; death of, 10; exiled, 10; military 
campaigns of, xxvi, 8-9, 204-6 

Artigas Department, 56; development in, 
62; drought in, 124; farm workers un- 
ion in, 74; rainfall in, 55; ranches in, 
119, 122; temperatures in, 55 

ASCEEP. See Students' Social and Cul- 
tural Association for Public Education 

Asociacion de Empleados Bancarios del 
Uruguay. See Uruguayan Association 
of Bank Employees 

Asociacion Latinoamericana de Integra- 
tion. See Latin American Integration 



Association 

Asociacion Nacional de Broadcasters 
Uruguayos. See National Association of 
Uruguayan Broadcasters 

Asociacion Nacional Republicana. See 
National Republican Association 

Asociacion Rural. See Rural Association 

Asociacion Social y Cultural de Estudi- 
antes de la Ensenanza Publica. See Stu- 
dents' Social and Cultural Association 
for Public Education 

Association of Newspapers of Uruguay, 
190 

Association of Professors of the Univer- 
sity of the Republic, 73 
Atlantic Ocean, xxiv 
Atlantida, 60 

Australia: emigration to, 69 
autonomous agencies. See autonomous en- 
tities 

autonomous entities, 25, 104, 129-30, 
169; decrease in spending by, 113; ef- 
fect of, on economy, 104; employment 
in, 115; largest, 129; as percentage of 
gross domestic product, 107; privatiza- 
tion of, xxxiv; role of, in government 
administration, 161-62; under San- 
guinetti, 130 

Axis, 192 

Ayui, 9 

Azucitrus citrus plant, 130 



Bahrain, 197 

balance of payments, 28, 106, 112, 
145-46 

balance of trade, 98, 142, 144, 145; un- 
der military government, 108-9; posi- 
tive, 102 

Baldomir, Alfredo, 31, 192; political free- 
dom restored under, 32 

Baldomir administration, 32; neutrality 
of, in World War II, 32 

Banco Comercial. See Commercial Bank 

Banco de la Republica Oriental del Uru- 
guay. See Bank of Uruguay 

Banco de Seguros del Estado. See State In- 
surance Bank 

Banco Hipotecario del Uruguay. See 
Mortgage Bank of Uruguay 

Banda Oriental, xxv, xxvi, 3, 8, 204; an- 
nexed by Brazil, 10 



278 



Index 



banking crisis, 38, 45, 123, 134; govern- 
ment intervention in, 45, 135 

banking system, 20-21, 110, 132, 134-36; 
control by, of foreign currency sales, 
30; effect of Great Depression on, 28; 
foreign influence in, 71; money laun- 
dering in, xxxi-xxxii, 136, 226; net 
worth of, 135; offshore transactions, 
xxxi, 136; regulations on, xxxi; secre- 
cy laws in, xxxi 

Bank of Uruguay (BROU), 21, 59, 134; 
in banking crisis, 135; foreign curren- 
cy sales under, 35; foreign exchange 
under, 28; gold reserves of, 34; nation- 
alized, 22-24; state control of, 110 

banks: commercial, 134; deregulation of, 
108, 134; dollarization of, 98, 114, 123, 
134-35; foreign, 44; internationaliza- 
tion of, 136; problems in, 109; savings, 
134 

barbed wire, 18, 56, 102 
Barran National Party, 175 
Barrios Tassano, Luis A., 193 
Basques, 16 

Batalla, Hugo, 47, 176, 177, 178 
Batlle, Cesar, 34 
Batlle, Lorenzo, 34 

Batlle Berres, Luis, 5, 34, 41, 180; agen- 
da of, 34-35; cooperation of, with Her- 
rera, 35; death of, 38; industrial policies 
of, 128 

Batlle Ibanez, Jorge, xxiv, 41, 44, 174, 
175, 180-82; background of, 180; cam- 
paign of, 180-81 
Batlle y Grau, Lorenzo, 17, 19, 21, 180 
Batlle y Ordonez, Jose, 4, 19, 34, 103, 
180; collegial executive proposed by, 
154; coparticipation proposed by, 156; 
death of, 27 
Batlle y Ordonez administration, 4, 
21-26; capital punishment abolished 
under, 159; foreign policy under, 191; 
labor legislation under, 104, 115; po- 
litical clashes under, 207; secularization 
under, 91; social reform under, xxvii, 
22, 24-26, 27, 103, 104; state control 
of economy under, 104 
Batllism, 103-4, 115; legacy of, 107 
Batllismo Unido. See United Batllism 
Batllist Reaffirmation Movement (MRB), 
174 

Batllists, 31, 32, 174 
Battle of Carpinteria, 12 



Battle of Las Piedras, 8-9 

Battle of the Rio de la Plata, 32, 208 

Baygorria Dam, 132 

beef (see also meat-processing industry), 
56; prices, 122, 123, 134; production 
of, 105, 122; salting enterprises, 12, 
102; subsidies for, in European Com- 
munity, 107, 109, 119 

beef exports, xxv, xxviii, 12, 56, 63, 97, 
99-100, 104; attempts to revitalize, 
113; decline in, 119 

Berreta, Tomas, 34 

Berro, Bernardo, 16-17 

Biological Weapons Convention, 218 

birth control, 66; practice of, 78 

birth rate, 65-66; in rural areas, 78 

Blanco Acevedo, Eduardo, 31 

Blancos. See National Party 

Blandengues Corps, 8 

Bohane people, 6 

Boisso Lanza Pact, 42 

Bolivia: economic integration with, 
146-47, 198 

Bonaparte, Joseph, 8 

Bonaparte, Napoleon, 8 

Bond International Gold, 131 

Borda, Juan Idiarte, 19; assassinated, 20 

Bordaberry, Juan Domingo R., 36 

Bordaberry Arocena, Juan Maria, xxviii- 
xxix, 5, 36, 41; resignation of, xxix, 
43 

Bordaberry administration, 189; destruc- 
tion of Tupamaros under, 210; econom- 
ic policies of, 5, 41 ; military takeover of, 
203, 211; repression under, 5, 43 

borders, 14 

Botswana, 197 

Brady, Nicolas, 144 

Brady Plan, 144, 198 

Braga, Enrique, 183 

Brazil, xxix, 11; annexation of Banda 
Oriental by, 10; competition from, 
xxxii, xxxiii; emigration to, 69; as ex- 
port market, 129, 145, 146; in Great 
War, xxvi; immigration from, 15; in- 
fluence of, 12; integration with, 197, 
198; intervention of, 14-15; invasions 
by, 191; military relations with, 217; 
relations with, 192, 195, 196; rivalry of, 
with Argentina, xxvi, 3, 191; tourists 
from, 140; trade with, xxxii, 16; treaties 
with, 14; in Triple Alliance, xxvi-xxvii, 
15, 207; war with, 3 



279 



Uruguay: A Country Study 



Britain: control of public services by, 18, 
30, 35; debt rescheduling with, 30; en- 
terprises of, 35; immigration from, 15, 
102; influence of, 191; intervention of, 
in Great War, xxvi, 13-14, 206; inva- 
sion of Uruguay by, xxv, 8; investment 
by, 24; loans from, 18; occupation of 
Montevideo by, xxv-xxvi; relations 
with, 31, 35, 192; in South Atlantic 
War, 195; trade with, 28 

Brito, Mariano, 183 

Broad Front, xxix, xxx, xxxv, 32, 40, 43, 
44, 47, 151, 152, 172, 174, 176-78, 
187; communist sector, 177; constit- 
uency of, 176; factions in, 176, 177; 
formation of, 92, 178; in 1989 election, 
182; opposition of, to amnesty for mili- 
tary leaders, 180; opposition of, to Mer- 
cosur, xxxiii; organization of, 178; 
organs of, 190; oudawed, 176; platform 
of, 176 

Broad Front Unity Faction (CUFO), 1 78 

BROU. See Bank of Uruguay 

Brum, Baltasar, 26, 29 

BU. See United Batllism 

budget deficit, xxiii, xxxv, 28, 80, 97, 
111-12; Bank of Uruguay's role in, 
135; inflationary means of financing, 
143; after Korean War, 111; under 
military regime, 108; as percentage of 
gross domestic product, 113 

Buenos Aires: migration to, 68; rivalry 
of, with Montevideo, 3, 7 

Bush, George H.W., xxxii, 198 

Busqueda, xxiv, xxx, 182, 186; circulation 
of, 189-90; editorial policy of, 189 

Cabot, Sebastian, 6 
Campisteguy, Juan, 26 
Canal Zone, 198 

Canelones Department, 60, 209; develop- 
ment in, 62; farming in, 119-20; liv- 
ing standards in, 74; population of, 57, 
66 

capital punishment, 25; abolished, 159 
Capitan Curbelo Airport, 139 
Caraballeda Declaration, 194 
Carnelli, Lorenzo, 26 
Carrasco Air Base, 221 
Carrasco International Airport, 59, 139 
Cartagena Consensus, 194, 195 
Carter, Jimmy, 193, 216 



Castro Ruz, Fidel, 194 
Cat, Carlos, 188 
Catalan people, 6 
Catholic Action, 188 
Catholic Church, Roman, 188 
Catholic Family Movement, 188 
Catholicism, Roman (see also church-state 
conflict; church-state separation), 91, 
159; influence of, 66, 77; as official 
religion, 11; restrictions on, 20, 77 
Catholics: political parties of, 92, 188; 

practicing, 188 
Catholic University of Uruguay, 87, 89, 
188 

Catholic Workers' Circle, 188 

cattle, xxv; economic importance of, 12, 

16; introduction of, from Europe, 6, 

100; methods of raising, 100-101; 

number of, 120, 123; production, 102; 

as source of wealth, 3 
cattle industry: beef, 56; dairy, 56, 57, 

123; effect of Great Depression on, 28; 

effect of Great War on, 14 
cattle ranchers, 28 
cattle ranches, 56, 63 
caudillos, 11, 206; patronage by, 72 
CBI. See Independent Batllist Faction 
cemeteries, 17, 91 
census of 1985, 57-58 
Center of Information and Studies of 

Uruguay (CIESU), 90-91 
Central Bank of Uruguay, 39, 59, 112, 

123, 134, 144, 161 
Centro de Informaciones y Estudios del 

Uruguay. See Center of Information 

and Studies of Uruguay 
Centro de Investigaciones Economicas. 

See Economic Research Center 
Centro Interdisciplinary de Estudios del 

Desarrollo, Uruguay. See Interdiscipli- 
nary Center of Development Studies, 

Uruguay 

Centro Latinoamericano de Economia 
Humana. See Latin American Center 
for Human Economy 

Cerro Largo Department, 56; develop- 
ment in, 62; ranches in, 119, 122 

Cersosimo, Pedro W., 175 

Chamber of Commerce, 71 

Chamber of Industry, 71 

Chamber of Representatives, 29, 153, 
182, 212; distribution of seats in, 173; 
members of, 162 



280 



Index 



Chamber of Senators. See Senate 
Chana people, 6 
Charlone, Cesar, 39 
Charrua people, xxv, 6 
Chiarino, Juan Vicente, 179 
children, 79 

Chile: integration with, 198; tourists 
from, 141 

China: relations with, 193, 196-97; San- 
guinetti's visit to, 152, 196-97 

Christian Democratic Party (PDC), 38, 
90, 92, 176-77, 178, 190; organs of, 190 

Christian Democratic Youth Movement, 
188 

church-state conflict {see also secularism), 
17, 22 

church- state separation, 25, 91, 154 
CIEDUR. See Interdisciplinary Center of 

Development Studies, Uruguay 
CIESU. See Center of Information and 

Studies of Uruguay 
Ciganda, Humberto, 178, 179 
CINVE. See Economic Research Center 
Cisplatine Province, xxvi, 10 
citizens' rights, 25 

Civic Union (UC), 46, 47, 151, 178; 

formed, 178 
Civic Union of Uruguay (UCU), 22, 92, 
178; opposition of, to amnesty for mili- 
tary leaders, 180 
civil liberties: repression of, 5, 43; restored 
under Amezaga, 33; suspended, 40, 42 
Civil Register, 19, 170, 171, 172 
civil rights, 204; of women, 34 
civil service, 168-69; as a career, 168; 
number of workers in, 169; training for, 
169 

CLAEH. See Latin American Center for 

Human Economy 
climate, 55-56; rainfall, 55; seasons, 55; 

temperature, 55; weather, 55-56; 

winds, 56 
CNH. See Herrerist National Council 
CNT. See National Convention of 

Workers 
coastal region, 60 

Co-Co Pact. See Colorado-Communist 
Pact 

Code of Criminal Procedure, 230 
Coincidencia Nacional. See National 

Coincidence 
"co-habitation arrangement." See Vaz- 
quez, Tabare 



colegiado. See collegial executive 
collegial executive (see also National Coun- 
cil of Administration; National Coun- 
cil of Government), xxiii, xxvii-xxviii, 
25, 28, 151; conflicts of, with president, 
155; eliminated, 29, 39; implemented, 
36, 154; ineffectiveness of, 156; pro- 
posed, 154; reestablished, 155 
Colonia, 57, 139, 147 
Colonia del Sacramento, xxv, 7 
Colonia Department, 57; development in, 

62; farming in, 119 
Colorado and Batllist Union (UCB), 39, 

155, 174, 182; factions of, 175 
Colorado-Communist Pact, 187 
Colorado Party (Colorados), xxix, xxxiv, 
xxxv, 18, 19, 36, 37, 38, 39, 40, 41, 
46, 47, 63, 151, 152, 156, 158, 172, 
173, 190; affiliation with, 173; and am- 
nesty for military leaders, 180; army of, 
206; clashes of, with National Party, 
207; Colorado-Communist Pact signed 
by, 187; division in, 25, 31; factions of, 
173, 174; income redistribution under, 
77; jobs dispensed by, 107; National 
Executive Committee, 175; in 1989 
election, 182; origins of, 4, 12; platform 
of, 4, 173, 174, 181; political control 
by, 101-3; profile of members of, xxvi, 
72; purge of, 44 
Colorado Party for Tradition (Sosism), 26 
Colorado Party-General Rivera (River- 
ists), 25 

Comando Juan Antonio Lavalleja. See 

Juan Antonio Lavalleja Command 
Comision de Productividad, Precios, e 

Ingresos. See Productivity, Prices, and 

Income Commission 
Command and General Staff School, 221 
Command and Staff School, 219 
Commercial Bank, 134, 135; sale of, xxxi 
commercial sector, 115 
communications, 18, 19, 132, 140, 213; 

broadcast facilities, 140 
communism, 177; as labor ideology, 116 
Communist Party of Uruguay (PCU), 

xxx, 26, 31, 32, 116, 176; allied with 

Christian Democrats, 92; banned, 43; 

Colorado-Communist Pact signed by, 

187 

compadrazgo, 78 

Conae. See National Council for Edu- 
cation 



281 



Uruguay: A Country Study 



Conapro. See National Conciliatory 
Program 

Concertacion Nacional Programatica. See 
National Conciliatory Program 

Confederation of State Civil Service Or- 
ganizations, 73 

Consejo de Estado. See Council of State 

Consejo de la Nacion. See Council of the 
Nation 

Consejo de Seguridad Nacional. See Na- 
tional Security Council 

Consejo Nacional de Administracion. See 
National Council of Administration 

Consejo Nacional de Education. See Na- 
tional Council for Education 

Consejo Nacional de Gobierno. See Na- 
tional Council of Government 

Consejo Nacional Herrerista. See Her- 
rerist National Council 

constitutional reform, 155 

constitution of 1830, 11, 152, 153-54; 
courts under, 154; departments under, 
154; General Assembly under, 153; 
Neighbors' Council under, 154; presi- 
dent under, 153; violations of, 154 

constitution of 1917, 25, 152, 154-55; col- 
legia! executive under, 154; copartici- 
pation under, 154; president under, 
154; separation of church and state un- 
der, 154 

constitution of 1934, 29, 152; collegial ex- 
ecutive under, 155; Council of Min- 
isters under, 155; Supreme Court of 
Justice under, 155 

constitution of 1942, 33, 155-56 

constitution of 1952, 36, 152; copartici- 
pation under, 156 

constitution of 1967, 39, 152, 156-59; 
amendment procedure for, 157; copar- 
ticipation under, 156; education under, 
159; General Assembly under, 156; 
legislation under, 156; military decrees 
amending, 157, 158; new text for, 
158-59; Permanent Commission un- 
der, 156; president under, 156, 228 

constitution of 1980 (military): rejected, 
xxix, 158, 203, 212 

Constitution of the United States, 9 

construction, 76, 130-31; decline in, 112; 
growth of, 131 

Contadora Support Group {see also Group 
of Eight), 193 

Contentious- Administrative Tribunal, 



164, 165; duties of, 165; members of, 
165 

Convention Nacional de Trabaj adores. 
See National Convention of Workers 

Convention against Illicit Traffic in Nar- 
cotic Drugs and Psychotropic Sub- 
stances, 191 

coparticipation, xxvii, 17, 33, 156, 
172-73; ended, 21, 39; initiated, 154, 
154; mandated, 36 

Coprin. See Productivity, Prices, and In- 
come Commission 

Corriente Batllista Independiente. See In- 
dependent Batllist Faction 

Corriente de Unidad Frentamplista. See 
Broad Front Unity Faction 

Corriente Popular Nacionalista. See Na- 
tionalist Popular Faction 

Corriente Renovadora. See Renewal 
Faction 

Corte Suprema de Justicia. See Supreme 

Court of Justice 
Cosena. See National Security Council 
Cote dTvoire, 197 

Council of Ministers, 155, 159; duties of, 

161-62; members of, 161-62 
Council of State, 32, 42, 43, 157, 211, 216 
Council of the Nation, 157, 212, 216 
coup d'etat: of 1898, 20; of 1933, 29, 155, 
208 

court system (see also under individual courts), 
165-68, 230; appellate, 167; justice of 
the peace, 168; juvenile, 231; military, 
214-15 

CPN. See Nationalist Popular Faction 
crime, 226 

criminal justice, 204, 229-32 
criollos, 8, 64-65 
Crottogini, Juan Jose, 176 
Cuadernos de Marcha, 190 
Cuareim culture, 6 

Cuba: relations with, 193, 194-95; trade 
with, 16, 194; visit of Vazquez to, xxxi 

Cuestas, Juan Lindolfo, 20 

CUFO. See Broad Front Unity Faction 

currency: collapse of, 45; convertibility of, 
44; devaluation of, 28, 30, 39, 135; 
market, 114 

customs laws, 18 

Customs Regulations Act (1815), 10 



dairy industry, 56, 57, 123 



282 



Index 



Daverede, Julio, 179 

debt: burden, 109; crisis, 143; domestic, 

98, 99; foreign, 98, 111; policy, 143; 

ratio of, to gross domestic product, 143; 

service, 143-44, 145 
Declaration of Colonia, 196 
defense industry, 216 
defense spending, 215-16; for equipment, 

215; as percentage of government 

spending, 80, 215-16; as percentage of 

gross national product, 216; reduced, 

xxx, 203, 215 
Demichelli Lizaso, Alberto, 43 
Democratic Blanco Union (UBD), 37, 38 
Democratic Traditionalism (Trademo), 

174 

departments (see also under individual depart- 
ments), 11, 169-70 

development plans: five-year, 41; ten- 
year, 39 

DGID. See General Directorate of Defense 

Information 
DGSS. See General Directorate of Social 

Security 
Diaz de Solfs, Juan, xxv, 6 
diplomatic relations, 161 
Direccion General de Information de 

Defensa. See General Directorate of 

Defense Information 
Direccion General de Seguridad Social. See 

General Directorate of Social Security 
"directing influence," 19 
dissidents, 38 

Divisa Blanca. See White Emblem 
divorce, 22, 24-25; grounds for, 77-78; 

legalized, 91; rate, 78 
Doctrine of National Security, 43, 192 
dollar: appreciation of, 143; decline of, 

142 

domestic goods, 103 

domestic industries, 106; market for, 
xxxiv, 127, 128 

domestic servants, 76, 78 

double simultaneous vote, 171 

drought, effect of: on agricultural produc- 
tion, 124; on hydroelectric generation, 
145; on livestock production, 122 

drug abuse, 82, 83, 226, 231 

drug trafficking, 83, 136, 226, 231; Unit- 
ed States policy on, 199, 209 

Dumas, Alexandre, 13 

Durazno, 209 

Durazno Air Base, 221 



Durazno Department, 56; development 
in, 62; ranches in, 119, 122 



East Germany. See German Democratic 
Republic 

Echegoyen, Martin R., 38 

economic: austerity, xxx, xxxi, xxxiii; 
growth, 99; integration, 146-47, 193; 
reform, 25-26, 97; stabilization, 112; 
stagnation, xxviii, xxxiv 

economic development, 35, 51, 179; in 
early twentieth century, 97; in interior 
region, 56 

economic policies, 40, 111-14; under Bor- 
daberry, 5, 41; under Sanguinetti, 
112-13; as motivation for emigration, 
68; military, 44, 45, 97, 112; of Nation- 
al Party, 5; of Pacheco, 5; of Vegh, 45, 
46 

Economic Research Center (CINVE), 90 
economic restructuring: measures, 107-8; 

under military regime, 107-9; results 

of, 108, 109 
Economist, 144 

economy, 12; Batllist legacy for, 107; in 
colonial period, 100-101; crisis of 1890, 
20; decline of, in 1950s, 36, 100; for- 
eign involvement in, 102; free-market, 
38, 41; government's role in, 97, 109, 
111; informal sector of, 70, 74, 76; in 
littoral region, 57; under military re- 
gime, 107-9; postindependence, 101; 
stagnant, 69; state control of, 104 

Economy Institute, 105 

Ecuador, 198 

education (see also under type of school), 51 , 
86-91; under Colorados, 89-91; com- 
pulsory, xxvii, 159; of elite, 70; evolu- 
tion of, 88-89; free public, xxvii, xxviii, 
69, 72, 80, 159; local jurisdiction over, 
170; of middle class, 73, 78; under mili- 
tary rule, 89; origins of, 88-89; poli- 
cy, 24; primary, 86; private, 70; reform 
of, 4, 19, 89; religious, 22; secondary, 
39; spending on, 80-82, 89, 90; of 
women, 78 

education system, 86-88; facilities of, 86; 
purges of, 88-89; teachers rehired by, 
90; under Terra, 31 

EE-PV. See Animal Welfare Ecological 
Green Party 

elderly: poverty among, 76 



283 



Uruguay: A Country Study 



El Clarin, xxxii 
El Dia, 21, 34, 39 

election of 1989, xxx, 152, 180-82; can- 
didates in, 181-82; issues in, 181 ; out- 
come of, 182 

elections, 159; campaign funds for, 172; 
of 1938, 31; of 1971, 40-41; of 1976, 
43; of 1982, 46; of 1984, 47; schedule 
for, 171, 173; suspended, 43; tabula- 
tion of results of, 171 

Elections Law, 20 

Electoral Court, 26, 164, 165, 171, 180; 
duties of, 165, 172; members of, 165 

electric generation, 24, 131-32; Paso de 
los Toros Dam, 31, 131; Salto Grande 
Dam, 131-32 

electric utility company, 21, 22 

Elio, Javier, 8, 9 

elite, business, 71, 101 

elite, political, 21, 71-72, 101; back- 
grounds of, 72; caudillos in, 72; occu- 
pations of, 72 

elite, ranching, 70-71, 101; education of, 
70; origins of, 70 

Ellauri, Jose, 17 

El Palmar Dam, 132 

El Popular, 176 

El Preciado, xxxv 

Embalse del Rio Negro, 31, 55 

emigration, 43, 65, 68-69; destinations 
for, 65, 69; effect of, on population 
growth, 62, 66; motivation for, 68-69, 
88, 89, 188; statistics, 68-69 

emigrants: age distribution of, 68; occu- 
pations of, 69; return of, 68, 69; statis- 
tics, 68-69 

employment: increase in rate of, 98; of 
middle class, 72, 73; moonlighting, 72; 
in private sector, 111; in public sector, 
97; of women, 72 

Endara, Guillermo, 198 

energy, 131-32; consumption of, 131; 
sources of, 131 

Enterprise for the Americas Initiative, 
xxxii, 198 

Entre Rios Province, Argentina, 14, 57 

ethnic composition, xxviii, 63, 64-65 

Eto-Ecologista — Partido Verde. See 
Animal Welfare Ecological Green Party 

Europe: emigration to, 69; immigration 
from, 27; trade with, 16 

European Community: beef subsidies in, 
107, 109, 119; as export market, 145 



exchange-rate policies, 70, 108, 113-14 

executive (see also collegial executive; 
president), 159-62; duties of, 161; pow- 
ers of, 161 

export: economy, 105; markets, 129, 145, 
146; policy, 119; sector, 107, 113 

export earners, 60; beef, 63, 99-100; 
hides, 100; mutton, 99-100; wool, 63, 
99-100 

export earnings: effect of, on labor, 104; 
during Great Depression, 10; stagna- 
tion of, 111 

exporters: effect of Great Depression on, 
28 

export model: success of, 104; in World 

War II, 105 
export-oriented growth, 107 
export-promotion strategy, 114 
exports, xxv, xxviii, 142; decline in earn- 
ings from, 100, 106, 143; diversifica- 
tion of, 99; emphasis on, 98, 109, 
128-29; growth of, 108; in Korean 
War, 105; nontraditional, 145; subsi- 
dized, 108; value of, 104; volume of, 
102 

external trade: issues, 194; regulation of, 
9-10 



Falkland Islands (Islas Malvinas), 195 
family: life, 77-80; ties, 78, 79 
farmers, 74 

Federacion de Estudiantes Universitarios 
del Uruguay. See Federation of Uru- 
guayan University Students 

Federacion Rural. See Rural Federation 

federalism: versus unitary rule, 4 

Federal League, 9 

Federal League for Rural Action (LFAR), 
36, 37, 71 

Federal Republic of Germany (West Ger- 
many): relations with, 190 

Federation of Uruguayan Sanitation 
Workers, 73 

Federation of Uruguayan University Stu- 
dents (FEUU), 189 

Ferdinand VII, 8 

Fernandez Faingold, Hugo, 174, 182 
Ferreira Aldunate, Wilson, 40, 41, 44, 47, 

151, 175, 179 
fertility, 66 

FEUU. See Federation of Uruguayan 



284 



Index 



University Students 

Fidel. See Leftist Liberty Front 

Figari, Pedro, 65 

financial markets, 108 

financial sector, xxiv, 45, 134-36 

Finch, M.H.J. , 128 

fishing, 125-26; exports, 126; fleet, 125; 
as percentage of gross domestic prod- 
uct, 109; production, 126 

fish-processing industry, 126 

Flores, Venancio, 15, 17 

Flores Department, 56; development in, 
62; ranches in, 119 

Flores Silva, Manuel, 174 

Florida Department, 56; development in, 
62; farming in, 119-20 

Food and Agriculture Organization of the 
United Nations, 126 

foreign debt, xxix, 31, 97, 107, 108, 141, 
142-44, 178, 181; Latin American strat- 
egy for, 193; as percentage of gross do- 
mestic product, 142; renegotiation of, 
194, 198 

foreign economic relations, 141; with 
United States, xxxii, 141 

foreign exchange, xxxi, 37, 142; agricul- 
tural production as source of, 119; 
liberalization of, 108; sales of, 28; wool 
production as a source of, 122 

foreign policy: under Batlle y Ordonez, 
191; influences on, 191; under Lacalle, 
197-99; under Terra, 31 

Foreign Service Law, 197 

forestry, 126-27 

forests, 56, 119; land area of, 126 
For the Fatherland (PLP), 40, 175, 182; 

and amnesty for military leaders, 180 
France, xxviii; immigration from, 16, 
102; influence of, 191; intervention of, 
in Great War, xxvi, 13-14, 206; mate- 
riel acquired from, 209, 215; military 
cooperation with, 208; support of, 
against Argentina, 12 
Franciscans, xxv 
Fray Bentos, 16, 57, 139 
Freedom and Change, 174 
Freemasons, 17 
free-trade zones, xxiv, 147 
Frente Amplio. See Broad Front 
Frente Izquierda de Libertad. See Leftist 

Liberty Front 
Friedrich Ebert Foundation, 190 
Friedrich Naumann Foundation, 190 



Frigonal. See National Refrigerating 
Frigorffico Nacional. See National Re- 
frigerating 
Frugoni, Emilio, 176 
full-stop law. See amnesty law 
Fuerte de San Jose, 7 
fusion, xxvi, 16 



Gabriel Terra Dam, 132 

Garibaldi, Giuseppe, xxvi, 13 

GATT. See General Agreement on Tariffs 

and Trade 
gauchos, xxv, 3 

GDP. See gross domestic product 
General Agreement on Tariffs and Trade 

(GATT), 191 ; Uruguay Round of, xxxi, 

193 

General Artigas Bridge, 57 
General Artigas Military Airport, 221 
General Assembly, 5, 17, 37, 42, 155, 
159; campaign funds allocated by, 
172; civil liberties suspended by, 40; 
under constitution of 1967, 156; dis- 
solved by Baldomir, 32; dissolved by 
military government, xxix, 44, 157, 
211; duties of, 162-64; elections for, 
162, 171-72; election of judges by, 
164-65, 166; executive influence in, 19; 
legislation in, 164; members of, 162; 
powers of, 153, 162-64; restored, 33, 
212 

General Confederation of Labor, 37 

General Confederation of Uruguayan 
Workers, 27 

General Coordinating Commission, 196 

General Directorate of Defense Informa- 
tion (DGID), 217 

General Directorate of Social Security 
(DGSS), 85 

General Directorate of Statistics and Cen- 
sus, xxxiv, 66, 68, 77 

General Union of Workers (UGT), 37 

geography, 52-62; hydrography, 52-55; 
topography, 52 

Geopolitica do Brasil (Golbery do Couto e 
Silva), 43 

George, Henry, 24 

German Democratic Republic (East Ger- 
many): relations with, 196 
Germany, 31, 32, 192 
Gestido, Oscar, 39 



285 



Uruguay: A Country Study 



Gillespie, Charles Guy, xxiii 

Giro, Juan Francisco, 16 

"Girondists of 73," 17 

GNP. See gross national product 

Golbery do Couto e Silva, Artur, 43 

gold reserves, xxix, 34, 146 

gold standard, 18 

Gorbachev, Mikhail S., 196 

government, civil: control of military by, 
203; and labor, relationship between, 
115-17, 118; reduction of spending by, 
112; restoration of, 117, 151, 212; role 
of, in economy, 97, 109, 111; role of, 
in labor policy, 115 

government, local, 169-70; administra- 
tion of, 169; departmental board, 169, 
170; governor of, 169, 170; mayor of, 
169-70; powers of, 169 

government, military, xxiii, 17-18, 107; 
balance of trade under, 108-9; bank- 
ing under, 134; civil service abolished 
by, xxix, 168; crimes committed by, 
xxix-xxx; diplomacy under, 192; eco- 
nomic policies of, 44, 97, 112; ended, 
xxix; export policies of, 119, 128-29; 
human rights abuses by, 186, 203; in- 
itiation of, xxviii-xxix, 211; interest 
groups banned by, 189; judiciary un- 
der, 166; labor under, 116-17; person- 
nel assignments under, 211; political 
repression under, 211; torture under, 
211 

government structure, 159-70; executive, 
159-62; judiciary, 165-68; legislature, 
162-65; public administration, 168-69; 
succession in, 162 

GrqfSpee, 32 

Grauert, Julio Cesar, 26, 29 

Great Depression, xxviii, 28, 100, 111; 

exports during, 105; industry during, 

128 

Great War (1843-52), xxvi, 13-14; Ar- 
gentina in, xxvi; effect of, on cattle in- 
dustry, 14; governments in, 13; 
international intervention in, 13-14 

Grito de Asencio Integration Movement, 
177 

Gros Espiell, Hector, 183, 197 
gross domestic product (GDP), xxiii, 51; 
agricultural production as percentage 
of, 109, 118; autonomous entities as 
percentage of, 107; budget deficit as 
percentage of, 113; decline in, 112; 



defense spending as percentage of, 216; 
fishing as percentage of, 109; foreign 
debt as percentage of, 142; growth of, 
xxx, 45, 98, 108, 109, 110; health care 
spending as percentage of, 80; indus- 
trial output as percentage of, 106, 109, 
127, 128; livestock raising as percen- 
tage of, 106, 109; in 1990, 97; ratio of 
debt to, 143; service sector as percen- 
tage of, 110, 132 
gross national product (GNP), 37, 216 
Group of Eight (see also Contadora Sup- 
port Group; Group of Rio), 193, 194, 
198 

Group of Rio, 198 
Group of Seven, 198 
Guarani people, xxv 
Guerra Grande. See Great War 
Gutierrez Ruiz, Hector, 43 



Haedo, Eduardo Victor, 38 
Hail Mary, 188 

Hanns-Seidel Foundation, 190 
HDI. See Human Development Index 
health care: causes of death, 82; coverage, 

80; distribution of, 82; facilities, 80, 82, 

83; immunizations, 84; private, 80; 

public, 72, 80, 83-84; spending on, 80, 

84 

health plans, 83-84 

Herrera, Juan Jose de, 180 

Herrera, Luis Alberto de, 25, 27, 36, 37, 
151, 155; and coup of 1933, 29; cooper- 
ation of Batile Berres with, 35; death 
of, 37; opposition of, to United States 
bases, 32 

Herrera y Obes, Julio, 19 

Herrerist Movement, 175 

Herrerist National Council (CNH), 175 

Herrerists, 32, 38, 40, 41, 42, 155 

highways. See roads 

Honorary Commission for Imports and 

Exchange, 30 
horses: introduction of, from Europe, 6, 

100 

hospitals: military, 83; public, 24, 80, 83 
household composition, 78 
housing, 59-60 
Hudson, W.H., xxv 
Human Development Index (HDI), xxiii, 
51-52 



286 



Index 



human rights, 47, 48, 204; groups, 225- 
26; violations by military, 179, 186, 
193, 203, 216, 226 

hydroelectricity, 131-32, 145 

hydrography, 52-55 



IADB. See Inter- American Defense Board 
IDB. See Inter- American Development 
Bank 

Iglesias, Enrique, 193, 194 

IMET. See International Military Educa- 
tion and Training 

IMF. See International Monetary Fund 

immigration, 15-16, 20, 24, 27, 51; from 
Africa, 65; from Brazil, 15; from Brit- 
ain, 15, 102; effect of, xxvii; effect of, 
on ethnic composition, 64; effect of, on 
Montevideo, 102-3; from Europe, 27; 
from France, 16, 102; from Italy, xxvii, 
15, 51, 65, 102; from Lebanon, 27; as 
source of labor, 106; from Spain, xxvii, 
15, 16, 51, 102; from Syria, 27 

impeachment, 162-64 

imports: decline in, 106; effect of Great 
Depression on, 28; industrial, 145; 
limitations on, 30; sources of, 145 

import- substitution industrialization, 35, 
37, 71, 106, 111, 119, 128; shortcom- 
ings of, 106 

import tariffs, 103; reduction of, 108 

Imprensa Nacional. See National Printing 
Press 

income distribution, 76-77, 97, 99, 106 
independence, 152; declared, 11, 206; 

movement, 3, 8-11, 204-6 
Independent Batllist Faction (CBI), 174 
Independent Nationalists, 31, 32, 37 
India, 197 

Indians (see also under names of individual peo- 
ples), 10; genocide of, 6, 65, 206; 
resistance by, to European invaders, 3, 
91 

industrial development, 18; under 
Amezaga, 33; background of, 128-29; 
under Batlle Berres, 128; under Batlle 
y Ordonez, 105-6; effect of Great 
Depression on, 28, 128 

industrial growth: stagnation of, 106 

industrial imports, 145 

industrialists, 22 

industrial output, 128; as percentage of 



gross domestic product, 106, 109, 127, 
128 

industry, xxiii, 127-32; and agriculture, 
link between, 109; domestic consuma- 
bles, 99; growth of, 129; labor force in, 
74, 115; under military government, 
45, 108; problems in, 109; protectionist 
policy for, 24, 127-28; state control of, 
27; Terra's support for, 30 

INET. See National Institute of Techni- 
cal Education 

infant mortality, 82 

inflation, xxiii, 80, 143; attempts to 
reduce, 99, 113, 117; factors in, 108; 
increasing, 106, 107, 114; in 1950s, 37; 
in 1960s, 38, 39, 107; in 1970s, 45, 107, 
108; in 1980s, xxix, xxx, 98, 109, 110, 
112, 113; in 1990s, xxxiv 

infrastructure: development of regional, 
147; modernization of, 131 

Institute for the Scientific Nutrition of the 
People, 31 

Institute of Social Sciences, 89 

Institutional Act No. 1, 43 

Instituto de Economia. See Economy In- 
stitute 

Instituto Nacional de Educacion Tecni- 
ca. See National Institute of Technical 
Education 
"Instructions of the Year Thirteen," 9 
insurance companies, 110; privatization 
of, xxxi 

Integration Movement (MI), 178 
intellectuals, 38 

Intelsat. See International Telecommuni- 
cations Satellite Organization 

Inter-American Defense Board (IADB), 
192, 218 

Inter-American Development Bank 
(IDB), 193; loans from, 136 

Inter- American Foundation, 90 

Inter- American Treaty of Reciprocal As- 
sistance (Rio Treaty), 191, 192, 218 

Interdisciplinary Center of Development 
Studies, Uruguay (CIEDUR), 91 

interest groups, 73, 183-90 

interest rates, 142-43 

Interior Police, 228 

interior region, 56-57; agriculture in, 
56-57; departments in, 56; develop- 
ment in, 56-57; industry in, 56 
International Development Agency, 90 
international meetings, xxxi, 193 



287 



Uruguay: A Country Study 



International Military Education and 
Training (IMET), 216 

International Monetary Fund (IMF), 
xxxiv, 5, 39, 112, 143 

International Telecommunications Satel- 
lite Organization (Intelsat), 140, 191 

international trade, 144-45 

Interunion Workers' Assembly (or Ple- 
num) (PIT), 46, 76, 187 

investment: decline in, 111, 112; domes- 
tic, 97; foreign, 24; growth of, 108; 
public, 111, 130; by ranchers, 105, 106 

Iraq, xxxii, 198 

Israel: emigration to, 65 

Italy: immigration from, xxvii, 15, 51, 
65, 102; intervention of, in Great War, 
13, 206; relations with, 31 

Jackson, Geoffrey, 40 

Jesuits, xxv, 17 

Jews, 65, 92 

John XXIII (Pope), 92 

Juan Antonio Lavalleja Command, xxxv 

judges: appointment of, 164, 166; of first 
instance, 167-68; justices of the peace, 
168; lawyer judges, 167; requirements 
for, 166; terms of, 166 

judicial system, 229-30; inmates under, 
231; suggested changes to, 230; sus- 
pects under, 230; trials under, 230 

judiciary (see also under individual courts), 
165-68; courts of, 165, 167; under mili- 
tary government, 166; public defenders 
in, 168 

Konrad Adenauer Foundation, 190 
Korean War: exports during, xxviii, 105, 
128 

labor, 114-18; activists, 225; contracts, 
117-18; and government, relation- 
ship between, 115-17, 118; legislation, 
103-4, 115; movement, 115-17; poli- 
cy, 115 

labor force: in agriculture, 115; in civil 
service, 169; distribution of, 114-15; ef- 
fect of export earnings on, 104; in in- 
dustry, 74; profile of, 114-15; size of, 
114 

labor unions, xxxi, 32, 37, 187-88; con- 
federation of, 76; conflict by, xxxiv, 38, 
40, 204; Lacalle's attempt to regulate, 



187-88; under military government, 
xxix; political activity of, 224, 225; re- 
stored under Sanguinetti, 187; role of, 
in restoring civilian government, 117 

Lacalle administration, xxx, 183; austeri- 
ty program under, xxx, xxxi; banking 
under, 136; debt under, 142; fishing in- 
dustry under, 126; labor unions under, 
187-88; party politics under, 173; and 
Vazquez's "co-habitation arrange- 
ment," 152 

Lacalle de Herrera, Luis Alberto, xxiii- 
xxiv, xxxii-xxxiii, 44, 147, 151, 175, 
180, 188; appointment of armed forces 
commanders by, 186-87; background 
of, 151, 180; campaign of, 180-81; eco- 
nomic adjustment under, 99; support 
for, xxxv, 182 

Laguna del Sauce, 220 

Laguna Merin, xxiv, 14, 55 

La Paloma, 125 

La Rocha National Movement (MNR), 
175, 180, 182 

Latin American Bishops Conference: of 
1968, 92; of 1979, 92 

Latin American Center for Human Econ- 
omy (CLAEH), 90 

Latin American Integration Association 
(ALADI), xxxi, 191, 198 

Latinamerica Press, 190 

Latorre, Lorenzo, 18, 63 

Lavalleja, Juan Antonio, xxvi, 11, 12 

Lavalleja Department, 56; development 
in, 62; ranches in, 119 

Law of Common Education (1877), xxvii, 
88 

Law of Mandatory Civil Marriage, 19 
Law of Professional Associations, 116 
lawyer courts, 166 
lawyers, 168 

leather, 12, 56, 100; exports, 102, 145 

Lebanon: immigration from, 27 

Lebret, Father, 92 

Leftist Liberty Front (Fidel), 38 

Lend-Lease Agreement, 208 

LFAR. See Federal League for Rural 

Action 
Liberal Party, 178 

Libertad y Cambio. See Freedom and 
Change 

Liebig Meat Extract Company, 16 
life expectancy, xxiv, 66, 82, 86; effect of, 
on population growth, 62 



288 



Index 



Liga Federal de Accion Rural. See Fed- 
eral League for Rural Action 
List 14, 34, 38, 39 
List 15, 34, 174 
List 85, 174 
List 99, 40, 47 
List 123, 174 
literacy rate, 86 
littoral region, 57 

livestock exports, xxviii, 109; transfer of 
earnings from, 111 

livestock prices, 123-24 

livestock production, 102; effect of 
drought on, 122; land area dedicated 
to, 123; methods, 118; as percentage of 
gross domestic product, 106, 109 

livestock products, 105; dependence on, 
99 

livestock raising, 16, 120-23; improve- 
ments in, 18; methods of, 99, 118, 122 

livestock sector {see also cattle; sheep), 
xxiii, 5; under Batlle y Ordonez, 104; 
credit problems in, 134; liberalization 
of, 44; price controls on, 107; recovery 
in, 119; stagnation in, 35, 36-37, 101; 
Terra's support for, 30 

living standards, 77; of blue-collar wor- 
kers, 74; of farmers, 74; of middle class, 
73 

Llamadas, 65 

loans: from Britain, 18; dollar-denomi- 
nated, 123; from United States, 27, 
192 

Lopez Balestra, Oscar, 175 
lower class, 70, 74-76; as proportion of 
population, 70 



magazines, 59 
Magellan, Ferdinand, 6 
Malaysia, 197 

Maldonado Department, 50; construction 
boom in, 131; development in, 62; 
ranches in, 119 

MAN. See Nationalist Action Movement 

Manini Rios, Carlos 25, 27 

Mann, Horace, xxvii 

manufactured products, 106 

manufacturing: agricultural inputs for, 
118, 130; and agriculture, relationship 
between, 118; decline in, 112; nation- 
alization of, 111 



Marcha, 190 

Maritain, Jacques, 92 

markets: agricultural, liberalization of, 
44; currency, 114; domestic, xxxiv, 
127, 128; export, 129, 145, 146 

marriage: common-law, 78; equality in, 
78-79; mandatory civil, 19, 77, 91 

Martinez Trueba, Andres, 36, 36 

Mate Amargo, 190 

materiel: acquisition of, 209, 215; mod- 
ernization of, 208 
maternity leave, 37 

MBPP. &e Popular and Progressive Blan- 
co Movement 

meat-processing industry (see also beef), 
16, 57, 123; agricultural inputs for, 
130; British control of, 24; economic 
changes in, 21; export by, xxviii, 145; 
improvements in, 102; refrigeration in, 
21-22, 102 

media, 59, 189-90 

medidas prontas de seguridad. See prompt 
security measures 

Medina, Hugo M., 186 

Mendez, Aparicio, 43 

Mercado Comun del Sur. See Southern 
Cone Common Market 

merchant marine, 213, 220 

Mercosur. See Southern Cone Common 
Market 

mestizos, xxv, 10, 65 

Metropolitan Guard, 229 

MGP. See Movement for the People's 
Government 

MI. See Integration Movement 

Michelini, Zelmar, 43, 47, 176 

middle class, 22, 24, 70, 72-73; debt in, 
73; as domestic market, 106; impor- 
tance of education to, 73; importance 
of tides to, 73; moonlighting in, 72; oc- 
cupations of, 72, 73; as proportion of 
population, 70 

Middle East: relations with, 197 

military, 183-87; amnesty for, xxix-xxx, 
179-80, 186, 212, 226; assistance, 209; 
government control of, 203; intelli- 
gence, 212, 217; involvement in poli- 
tics, 210-12; justice, 214-15; law en- 
forcement by, 210; officers, 201; 
peacekeeping activities, 218; political 
influence of, 186-87; political orienta- 
tion of, 203, 210, 211; reduction of, 
xxx, 203; regions, 217; suppression of 



289 



Uruguay: A Country Study 



Tupamaros by, xxviii, 203; takeover of 

Bordaberry government, 203 
Military Academy, 186, 209; established, 

208; training, 217, 219 
Military Academy at St. Cyr (France), 

207 

Military Air School, 209, 221 
Military Institute for Advanced Studies, 
217 

military personnel: benefits for, 214; 
demographic profile of, 210; morale of, 
214; pay for, 214; as percentage of 
population, 214; reaction of, to military 
government, 211 

military relations: with Argentina, 217; 
with Brazil, 217; with United States, 
217 

Millor Coccaro, Pablo, 175, 182 
MIN. See National Integrationist Move- 
ment 

Mineracao e Participacao. See Mining 

Copartnership 
mining, 131 

Mining Copartnership, 131 
Ministry of Economy and Finance, 39 
Ministry of Foreign Affairs, 197 
Ministry of Interior, 190, 228, 231 
Ministry of Justice, 158; abolished, 166; 

duties of, 166 
Ministry of National Defense, xxx, 110, 

214, 216; civilian as head of, 42; duties 

of, 217 

Ministry of Public Health, 82, 83, 84 

Ministry of Tourism, 141 

missionaries, xxv 

Mitrione, Dan A., 40 

MLN-T. See National Liberation Move- 

ment-Tupamaros 
MNC. See National Colorado Movement 
MNR. See La Rocha National Movement 
modernization, xxiv, 20, 22 
monetary exchange market, 38; unified, 

39 

monetary policy, 113-14; sterilization, 
114 

money supply, 107 

Montevideo, 12; British occupation of, 
xxv-xxvi, 8; Carrasco, 59; classes in, 
59; as commercial center, 7-8, 16; 
effects of economic growth on, 102; El 
Prado, 59; fortress at, 204; founded, 
xxiv, 3, 58, 101; health coverage in, 83; 
industrial development in, 105-6; labor 



movement in, 115; mayor of, 152, 182, 
183; naval base, 220; Old City, 58-59; 
Pocitos, 59, 60; population in, 11, 20, 
27, 66; poverty in, 77; protests in, 40; 
public services in, 35; rainfall in, 55; 
ranchers in, 70; rivalry of, with Bue- 
nos Aires, 3, 7; shantytowns in, 59, 
210; siege of, xxv, xxvi, 9, 13-14, 206; 
slave trade through, 7-8; temperatures 
in, 55; unemployment in, 76 

Montevideo, port of, 22, 125 

Montevideo Department, 183; courts in, 
167-68; development in, 62; govern- 
ment in, 170; population of, 57; popu- 
lation density of, 58 

Montevideo Police, 228 

Montevideo Port Authority, 26, 130 

Montevideo region, Greater, 57-60; 
departments in, 57 

mortality, 66; causes of death, 82; rate, 82 

Mortgage Bank of Uruguay, 134; nation- 
alized, 24 

Movement for the People's Government 
(MGP), 178 

Movimiento de Accion Nacionalista. See 
Nationalist Action Movement 

Movimiento de Independientes 26 de 
Marzo. See 26th of March Movement 
of Independents 

Movimiento de Independientes Revolu- 
cionario Oriental. See Uruguayan 
Revolutionary Movement of Inde- 
pendents 

Movimiento de Integracion. See Integra- 
tion Movement 

Movimiento de Integracion Grito de 
Ascencio. See Grito de Asencio Integra- 
tion Movement 

Movimiento de Liberation Nacional- 
Tupamaros. See National Liberation 
Movement-Tupamaros 

Movimiento de Participation Popular. See 
People's Participation Movement 

Movimiento de Reafirmacion Batllista. 
See Batllist Reaffirmation Movement 

Movimiento Herrista. See Herrist Move- 
ment 

Movimiento Integracionista Nacional. See 
National Integrationist Movement 

Movimiento Nacional Colorado. See Na- 
tional Colorado Movement 

Movimiento Nacional de La Rocha. See 
La Rocha National Movement 



290 



Index 



Movimiento Popular Blanco y Progresis- 
ta. See Popular and Progressive Blanco 
Movement 

Movimiento Popular Frenteamplista. See 
People's Broad Front Movement 

Movimiento por el Gobierno del Pueb- 
lo. See Movement for the People's Gov- 
ernment 

Movimiento Pregon. See Pregon Move- 
ment 

Movimiento Social Cristiano. See Social 
Christian Movement 

MPF. See People's Broad Front 
Movement 

MPP. See People's Participation Move- 
ment 

MRB. See Batllist Reaffirmation Move- 
ment 

MRO. See Uruguayan Revolutionary 

Movement of Independents 
MSC. See Social Christian Movement 



Nardone, Benito, 36, 37, 38 

National Administration for the Genera- 
tion and Transmission of Electricity 
(UTE), 129, 132; privatization of, 
xxxiv 

National Administration of Fuels, Alco- 
hol, and Portland Cement (ANCAP), 
28, 30, 45, 104, 129, 225; oil refining 
by, 132; privatization of, xxxiv 

National Administration of Ports (ANP), 
26, 129-30 

National Administration of Public Edu- 
cation, 89 

National Affordable Housing Institute, 31 

National Association of Uruguayan 
Broadcasters (ANDEBU), 190 

National Board for the Control of Drug 
Trafficking and Narcotics Abuse, 83 

National Coincidence, xxxi, xxxiii, 183 

National Colorado Movement (MNC), 
175 

National Conciliatory Program (Cona- 
pro), 117 

National Convention of Workers (CNT), 

xxix, 38 , 40; banned, 43, 76, 116; 

formed, 76; restored, 187; strike of 

1973, 42, 116 
National Corps of Firemen, 228-29 
National Council for Education (Conae), 

41, 89 



National Council for the Prevention and 
Repression of Illicit Traffic and Im- 
proper Use of Drugs, 226 

National Council of Administration, 
xxvii, 25 

National Council of Government, 36, 37, 
38, 156 

National Dairy Products Cooperative, 
123 

National Economic Inspection Commit- 
tee, 28-29 

National Electoral Office, 172 

National Federation of Secondary 
Teachers, 73 

National Fishing Development Plan, 125 

National Fishing Institute, 125 

National Guard, 206 

National Institute of Technical Education 
(INET), 88 

National Integrationist Movement 
(MIN), 175 

Nationalist Action Movement (MAN), 
178 

Nationalist Popular Faction (CPN), 175 
nationalization, 21-24, 111; of Bank of 
Uruguay, 22-24; of manufacturing, 
111; of Mortgage Bank of Uruguay, 24; 
of public services, 22; in service sector, 
22; weakened by Terra, 30 
National Land Settlement Institute, 35 
National Liberation Movement-Tupa- 
maros (MLN-T), 5, 38, 41-42, 177, 
224-25; amnesty for, 92, 158, 177, 189, 
224; defeat of, xxviii, 42, 177, 203, 210, 
225; established, 177, 225; opposition 
of, to amnesty for military leaders, 180; 
organs of, 190; reorganized, xxx, 177, 
225; terrorism by, xxviii, 40, 107, 203, 
225 

National Maritime Police, 220, 228 
National Mining and Geology Institute, 
131 

National Office of the Civil Service 
(ONSC), 168-69; abolished, 168; 
duties of, 169; training by, 169 

National Party (Blancos), xxix, xxxiv, 19, 
20, 32, 36, 40, 41, 43, 47, 63, 151, 152, 
156, 158, 172, 173, 190; administra- 
tions of, 37-39; affiliation with, 173; 
army of, 206; boycott of 1910 elections 
by, 22; clashes of, with Colorado Party, 
207; decline of, 174; divisions in, 
xxxiii-xxxiv, 32, 37, 38; economic 



291 



Uruguay: A Country Study 



policies of, 5; factions of, 173, 174, 175; 
insurrection by, 17, 21; jobs dispensed 
by, 107; origins of, 4, 12; platform of, 
4, 25, 173, 174, 181; popularity of, xxx, 
xxxv ; profile of members of, xxvi, 72; 
purge of, 44; support of ranchers for, 71 
National Police, 203, 210, 226-29; estab- 
lished, 226; number of personnel in, 
228; organization of, 204, 228; train- 
ing, 228 
National Printing Press, xxxiv 
National Refrigerating (Frigonal), 27 
National Republican Association (ANR), 
174 

National School of Public Administration 

(France) (Ecole Nationale d'Adminis- 

tration Publique), 169 
national security, 158; internal, 224-25; 

threats to, 203 
National Security Council (Cosena), 42, 

157, 211 

National Subsistence Council, 35 

National Telecommunications Adminis- 
tration (ANTEL), 130, 140 

National Traffic Police, 228 

Nava, Guillermo de, xxx, 218 

Naval Academy, 208, 220 

Naval Air Service, 208-9 

Naval Aviation Service, 209, 220 

Naval Club Pact, 47, 151, 166, 212 

Naval Training Center, 220 

navy, 208-9, 220; air base, 220; equip- 
ment of, 204; established, 208; ma- 
rines in, 209, 220; mission of, 204; 
naval base, 220; number of personnel 
in, 208, 220; organization of, 220; ship- 
yard, 216; training, 220; vessels of, 
208, 220 

neo-Batllism, 34-36 

Netherlands: emigration to, 69 

neutrality, 32, 192 

new peso, Uruguayan {see also peso), 45; 

collapse of, 73; floated against dollar, 98 
New Sector, 178, 182 
newspapers, 51, 59; party affiliations of, 

189 

Nicaragua: relations with, 193, 194 
North Tramway and Railway Company 

{see also State Railways Administration), 

18, 24 
Nueva Palmira, 147 
Nuevo Espacio. See New Sector 
nutrition, 51 



OAS. See Organization of American 

States 
Office of Labor, 115 
Office of Planning and Budget, 39, 40 
Oficina Nacional del Servicio Civil. See 

National Office of the Civil Service 
oil: crisis, 45, 107, 108, 122; imports, 131, 

132, 145; price of, 142 
Oman, 197 

ONSC. See National Office of the Civil 
Service 

Operation Manufacture, 123 
Organic University Law, 37, 88 
Organization of American States (OAS), 

191, 218, 194 
Oribe, Manuel, 4, 12; exiled, 12, 206; as 

president, 12, 206 
Oriental Republic of Uruguay, xxvi, 3; 

established, 11, 152-53 
Orthodox Herrerists, 38 
Ortiz, Dando, 175 



Pacheco Areco, Jorge, xxviii, 39, 47, 175, 
182, 189, 210; economic policies of, 5 

Pachequism, 39-41 

Pachequists, 42, 44, 175 

Pacto del Chinchulm. See Pork Barrel Pact 

Palestine Liberation Organization (PLO), 
197 

Panama, 198 
Pando, 209 

Paraguay: economic integration with, 
146-47, 198; relations with, 195; 
tourists from, 141; trade with, xxxii; 
war declared on, xxvii, 15, 207 

parity, 173 

Partido Colorado. See Colorado Party 
Partido Comunista del Uruguay. See 

Communist Party of Uruguay 
Partido de Democracia Avanzada. See Ad- 
vanced Democracy Party 
Partido Democrata Cristiano. See Chris- 
tian Democratic Party 
Partido Liberal. See Liberal Party 
Partido Nacional. See National Party 
Partido Nacional-Barran. See Barran Na- 
tional Party 
Partido por el Gobierno del Pueblo. See 

People's Government Party 
Partido por la Victoria del Pueblo. See 
People's Victory Party 



292 



Index 



Partido Socialista de los Trabaj adores. See 
Socialist Workers' Party 

Partido Socialista del Uruguay. See So- 
cialist Party of Uruguay 

Pascale, Ricardo, 144 

Paso de los Toros Dam, 31, 55 

Paso de Mendoza, 209 

pasture, 56, 100, 119 

Paul VI (Pope), 92 

Paysandu, 16, 57, 139 

Paysandu Department, 56, 57; develop- 
ment in, 62; ranches in, 119 

PCU. See Communist Party of Uruguay 

PDC. See Christian Democratic Party 

Penal Code (1889), 230-31; amended, 
231; inmates under, 231-32 

pensioners, 111; poverty among, 76 

pensions, xxiv, xxxv, 72, 84-86; decline 
in, 76; initiation of, 84; recovery of, 77 

People's Blanco Union (UBP), 175 

People's Broad Front Movement (MPF), 
177 

People's Government Party (PGP), 
176-77, 190; organs of, 190 

People's Participation Movement (MPP), 
177 

People's Victory Party (PVP), 177 
Pereira, Gabriel, 16 
perestroika, 187 

Pereyra, Carlos Julio, 44, 181, 182 
Perez, Jaime, 176 
Perez Piera, Hector, 179 
Permanent Civil Register Law, 20 
periodicals, 189-90 
Peron, Juan Domingo, 34 
Persian Gulf crisis, xxxii, 145, 198 
peso (see also new peso, Uruguayan): 

decline of, 143; devaluation of, 113, 

135; issued, 102 
PGP. See People's Government Party 
Piriapolis, 60, 125 

PIT. See Interunion Workers' Assembly 

(or Plenum) 
PIT-CNT, 46, 76, 187, 190; strike by, 47 
Pivel Devoto, Juan, 175 
Plenario Intersindical de Trabajadores. 

See Interunion Workers' Assembly (or 

Plenum) 

PLO. See Palestine Liberation Organi- 
zation 

PLP. See For the Fatherland 
PLUNA. See Uruguayan National Air- 
lines 



police. See National Police 
Police Training Academy, 228 
political: conflict, 63; development index, 

xxiii-xxiv; instability, 12, 101; rights, 

20, 25; violence, 28 
A Political Economy of Uruguay since 1870 

(Finch), 128 
political exiles, xxix; return of, xxiv, 69, 

225 

political parties (see also under individual par- 
ties), 17, 172-79; administrative struc- 
ture of, 174; affiliation with, 173; 
disputes among, 224; distribution of 
jobs by, 111; established, 4; factions of, 
26, 173; ideological differences be- 
tween, 174; legalized, 224; membership 
of, 72; political activity of, 224; prolifer- 
ation of, 22; restrictions on, 43; under 
military government, xxix 
Political Parties Law, 29, 35, 46, 171 
political prisoners, xxix; amnesty for, 158, 
204 

political uprisings, 31, 204, 224; in 1960s, 
38, 40; suppression of, 29, 210 

Polo Progresista. See Progressive Pole 

Pons Etcheverry, Eduardo, 175 

Ponsonby, John (Lord), 11 

Popular and Progressive Blanco Move- 
ment (MBPP), 178 

Popular Union, 38 

population, 20, 62-63, 97; aging of, 66, 
85-86; average age of, 85; birth rate, 
62; distribution of, 11, 20; in 1830, 11; 
in 1879, 16; factors in size of, 62; 
growth rate, 62, 65-66, 67, 97; im- 
migrant, 16; increase in, 27; in 1985, 
62; in 1988, 62 

Pork Barrel Pact, 28 

Por la Patria. See For the Fatherland 

port facilities, 125, 131; privatization of, 
xxxi 

Portugal: colony founded by, 7; indepen- 
dence from, xxvi; rivalry of, with 
Spain, xxv, 3, 204 

Portuguese military, xxv 

postal service, 19, 110 

poverty: families living in, xxxiv, 77 

Pregon Movement. See Movimiento 
Pregon 

presidency, 36 

president (see also executive), 25, 42; ap- 
pointment of armed forces commanders 
by, 186-87; as commander in chief of 



293 



Uruguay: A Country Study 



armed forces, 216; conflicts of, with col- 
legia! executive, 155; under constitution 
of 1967, 157; hierarchy under, 159; in- 
auguration of, 159 

Presidential Information Service 
(SEPREDI), 190 

press: freedom of, 189; restrictions on, 
xxix, 43, 210; services, 190 

PRESSUR, 190 

price controls, 108 

Primeras Lmeas Uruguayas de Navega- 
cion Aerea. See Uruguayan National 
Airlines 

prisons, 231-32 

privatization, xxiv, xxxi, xxxiv, 181; op- 
position to, xxxiii 

Productivity, Prices, and Income Com- 
mission (Coprin), 40 

professional associations, 73 

Progressive Faction, 178-79 

Progressive Pole, xxxiv 

prompt security measures, 37, 40 

protectionist policies, 103, 106, 127-28 

Protestants, 92 

PST. See Socialist Workers' Party 

PSU. See Socialist Party of Uruguay 

public: administration, 168-69; assis- 
tance, 31; health, 170; housing, 59; 
order, 224-25, 228 

Public Companies Law, xxxiii 

public employees: reinstatement of, 117; 
strikes by, 116 

Public Ministry, 166 

public sector: burdens of, 107; debt bur- 
den of, 109, 129, 141; size of, 98; as 
source of employment, xxviii, 97, 99, 
107, 111, 115; unions in, 98, 188 

public services: British control of, 18, 35; 
initiation of, 16; local jurisdiction over, 
170; modernization of, 20; nationaliza- 
tion of, 22; reduction of, xxx; role of 
state in, 35; spending on, 82 

public-works projects, 213 

Punta del Este, 34, 60, 125, 139; con- 
struction boom in, 131; international 
meetings in, xxxi; tourism in, 141 

purges, 44 

PVP. See People's Victory Party 
Qatar, 197 

Quagliotti de Bellis, Bernardo, 191 
Quijano, Carlos, 26, 190 



Radical Blanco Party, 26, 31 
radio: sets, 51; stations, 59, 140, 190 
railroads, 19, 35, 102, 139; passengers on, 
139 

Ramirez, Juan Andres, 183 

ranchers, 29-30; benefits granted to, 30; 
government conflicts with, 35; invest- 
ment by, 105, 106 

ranches, 210; land area of, 119 

Reagan, Ronald W., 194 

recession, 97, 109, 112, 129 

recreation, 79-80 

regional integration, 146-47, 195, 197-98 
regions, 56-62; coastal, 60; development 

of, 60-62; Greater Montevideo, 57-60; 

interior, 56-57; littoral, 57 
religion (see also under individual religions), 

11, 91-92; observance, 91 
Renewal Faction, 179 

Renovation y Victoria. See Renovation 

and Victory 
Renovation and Victory (RV), 175, 182 
repression, 29, 43; of labor, 116; under 

military government, xxviii, 211; as 

motivation for emigration, 68 
Republican Guard, 229 
Republica Oriental del Uruguay. See 

Oriental Republic of Uruguay 
research institutes, 90, 190 
rice, 56-57 
Rio Cuareim, 14 
Rio de Janeiro, 1 1 

Rio de la Plata, xxiv, xxv, 3, 6, 7, 9, 12 

Rio de la Plata Basin trade region, xxiv, 
195, 197, 198 

Rio de la Plata Basin Treaty, 191 

Rio Grande do Sul State, Brazil, 19-20 

Rio Negro, xxv, 31, 55 

Rio Negro Department, 56, 57; develop- 
ment in, 62; farming in, 119 

Rio Parana, 9, 14 

Rio Treaty. See Inter- American Treaty of 

Reciprocal Assistance 
Rio Uruguay, xxiv, xxv, 3, 9, 14, 52-55, 

139-40 
Rio Yaguaron, xxiv, 14 
Rio Yf, 55 

Rivera, Jose Fructoso, 4, 12; as president, 

12, 206 

Rivera Department, 56; development in, 
62; drought in, 124; ranches in, 119 
Riverism, 26 

Riverists. See Colorado Party-General 



294 



Index 



Rivera, 25 
rivers, 52-55 

River Transport System, xxxii, 196 
roads, 131, 136; maintenance of, 213; 

modernization of, 139 
Roballo, Alba, 178 

Rocha Department, 60; development in, 
62; ranches in, 119 

Rodriguez Pedotti, Andres, 147, 196 

Roosevelt, Franklin D., 31 

Rosas, Juan Manuel de, 12; exiled, 14; 
fall from power of, 14; in Great War, 14 

Rossi Passina, Heber, 179 

rural areas: under Batlle y Ordonez, 104; 
electrical network in, 132; families in, 
78; literacy rate in, 86; political affilia- 
tion in, 174; political control in, 101; 
population in, 11, 63; population 
growth rate in, 67; road network in, 
136; symbolic kinship ties in, 78 

Rural Association, 16, 18, 27 

Rural Code (1875), 18 

rural economy, 100; development of, 101 

Rural Federation, 24, 27, 70 

Ruralists, 38, 41, 74 

rural-urban conflict, 63; decrease in, 71; 
economic, 101; political, 4, 173-74 

rural workers, 74; under Amezaga, 33- 
34; wages of, 77 

Rural Worker Statute, 34 

RV. See Renovation and Victory 

Salto, 9, 16, 139 

Salto Department, 56; development in, 
62; ranches in, 119, 122 

Salto Grande Dam, 57, 131-32 

San Felipe de Montevideo {see also Mon- 
tevideo): founded, 7 

Sanguinetti Cairolo, Julio Maria, xxix, 
41, 47, 86, 146, 151, 175, 212; back- 
ground of, 151-52 

Sanguinetti administration, xxiv, 109-11, 
151-52, 179-80; agriculture under, 
109; autonomous entities under, 130; 
Colorado-Communist Pact signed by, 
187; economy under, 98, 109-11, 112, 
129; education under, 89; fiscal policy 
under, 112-13, 117-18; foreign rela- 
tions under, 192-97; human rights un- 
der, 158; infrastructure under, 132; 
labor under, 117, 187; news service of, 
190; party politics in, 173; restoration 



of democracy under, 189; tourism un- 
der, 141 

San Jose Department: development in, 

62; farming in, 119-20 
Santos, Maximo, 18 
Saravia, Aparicio, 19-20, 21 
Sarney Costa, Jose, 146 
School of Arms and Services, 210 
School of Diplomacy, 197 
School of Naval Specialization, 220 
schools, postsecondary: enrollment, 86 
schools, primary: enrollment, 86, 89; 

number of, 86-87; pupil-teacher ratio 

in, 87 

schools, secondary: academic, 87; enroll- 
ment, 86, 87, 89; political activity in, 
88; technical, 87, 89 
secularism {see also church-state conflict), 4 
secularization, 19, 24-25; origins of, 91 
Senate, 29, 33, 153, 155, 159; distribu- 
tion of seats in, 173; impeachment by, 
162-64; members of, 162; in 1989 elec- 
tion, 182 
Sendic, Raul Antonaccio, 38 
SEPREDI. See Presidential Information 
Service 

Seregni Mosquera, Liber, 47, 151, 177, 
178 

Serrato, Jose, 26 

service sector, 132-41; export of, 132-34; 

labor force in, 115; nationalization in, 

111; as percentage of gross domestic 

product, 110, 132 
Servicio Presidencial de Information. See 

Presidential Information Service 
sheep, xxv ; mutton, 122; number of, 120; 

raising, 16, 56, 102, 123; ranchers, 102; 

ranches, 56, 63 
Shevardnadze, Eduard A., 196 
Shultz, George P., 193, 194 
Singapore, 197 
slave trade, 7-8 
smuggling, 226 

Social Christian Movement (MSC), 181 

social classes, xxvii, 69-76; lower, 70; 
middle, 70; separation of, 59; stratifi- 
cation of, 70; upper, 70 

Social Democracy, 26 

social development, 51, 179; in interior 
region, 56 

Socialist Party of Uruguay (PSU), 22, 26, 
31, 32, 176; allied with Christian Demo- 
crats, 92; banned, 39 



295 



Uruguay: A Country Study 



Socialist Workers' Party (PST), 177 
social reform, 27; under Amezaga, 33; 

under Batlle y Ordonez, xxvii, 22, 

24-26, 27, 103, 104; end to, 25-26; 

during Great Depression, 28; weakened 

by Terra, 30 
social rights, 29 

social security system, 27, 80; abuse of, 
84-85; categories of benefits in, 85; 
government spending on, 80; pensions, 
84-86; reform of, xxxii; spending on, 
xxxv, 85 

social services: control of, 45; cutbacks in, 
xxiv 

Social Welfare Bank, 39, 84, 134 
social welfare programs, xxiii, xxviii, 4, 

22, 37, 97, 99; opposition to, 36; 

proposals to restructure, xxxiv-xxxv; 

supported by exports, 99, 111 
Sociedad de Defensa de la Tradition 

Familia y Propriedad. See Society for 

the Defense of Family Tradition and 

Property 

Society for the Defense of Family Tradi- 
tion and Property (TFP), 176 
Solano Lopez, Francisco, 15, 207 
Soriano, xxv 

Soriano Department, 56, 57; develop- 
ment in, 62; farming in, 119 

Sosa, Julio Maria, 26 

Sosism, 26 

South Africa, 197 

South Atlantic War, 195 

Southern Cone Common Market (Mer- 
cosur), xxxii-xxxiii; reaction to, xxxii- 
xxxiii 

The Southern Star/La Estrella del Sur, xxvi 
Soviet Union, 187; relations with, 31, 

193, 196; Sanguinetti's visit to, 152, 

196 

Soviet-Uruguayan Cultural Center, 196 

Spain: discovery of Uruguay by, 3; emi- 
gration to, 69; immigration from, 
xxvii, 15, 16, 51, 102; independence 
from, xxvi; invasion of, by Napoleon, 
8; relations with, 31; rivalry of, with 
Portugal, xxv, 3, 204 

Spanish military, xxv 

State Electric Power and Telephone Com- 
pany, 28 

State Electric Power Company, 22, 28 
state enterprises. See autonomous entities 
State Insurance Bank, 134, 147 



State Railways Administration {see also 
North Tramway and Railway Compa- 
ny), 24, 39 

State Security Law (1972), 42 

Stock Exchange, 59 

strike insurance, 37 

strikes, 210; of 1950s, 37; of 1960s, 116; 
of 1973, 42; of 1980s, 115, 117, 187, 
225; of 1990s, xxxiv, 188; by public 
employees, 116, 188; repressed, 26 

student demonstrations, 40, 43, 46, 88, 
210, 225 

student organizations, 225 

students, 87, 188-89; influence of, 188- 
89; number of, 88; political activity of, 
224, 225 

Students' Social and Cultural Association 
for Public Education (ASCEEP), 46 

sub-lemas. See political parties, factions of; 
see under individual parties 

suffrage {see also voting): under 1830 con- 
stitution, 11; under 1934 constitution, 
29; universal male, 26; women's, xxvii, 
29, 78, 159 

Supreme Court of Justice, 154, 155, 157, 
165, 215, 229-30; appointment of 
judges by, 167, 168; appointment of 
members of, 164, 166; members of, 
166; powers of, 166, 204; regeneration 
of, 166; women on, 159 

Supreme Military Tribunal, 215 

Switzerland, 51 

"Switzerland of South America," xxiii, 

34, 36, 51, 100 
Syria: immigration from, 27 



Tacuarembo Department, 56; develop- 
ment in, 62; drought in, 124; ranches 
in, 119, 122 

Taiwan, 196 

Tajes, Maximo, 19 

TAMU. See Uruguayan Military Air 

Transport 
Tanzania, 197 

tariff barriers, xxxii, 97; effect of, on 
domestic industry, 106, 127; lowered 
under military regime, 108 

tariff reduction agreements, 146 

Tarigo, Enrique E., 174 

taxes, 18, 24, 80; increased under Lacalle, 
xxx; increased under Sanguinetti, 113 



296 



Index 



tax policies, 70 

teachers: qualifications of, 86; training, 86 

telegraph networks, 102 

telephone system, 20, 51, 59, 140; privati- 
zation of, xxxi 

television: sets, 51; stations, 59, 140, 189 

Terra, Gabriel, xxviii, 27-28, 155; at- 
tempt to assassinate, 29; coup of, 208 

Terra, Juan Pablo, 92 

Terrists, 35, 155 

terrorism, xxxv, 107 

textile industry, 130 

TFP. See Society for the Defense of Fa- 
mily Tradition and Property 

Thirty-Three Heroes, xxvi, 11, 12 

Tlatelolco Treaty. See Treaty for the Pro- 
hibition of Nuclear Weapons in Latin 
America 

topography, 52 

torture, xxix, 42, 43, 180, 211 
tourism, xxxiv, 110, 132, 140-41; value 
of, 140 

Trademo. See Democratic Traditionalism 
Tradicionalismo Democratico. See Demo- 
cratic Traditionalism 
traditionalism, xxiv 

transportation, 18, 19, 35, 110, 132, 
136-40; automobile, 139; highway net- 
work, 136; international, 136; public, 
139; water, 139-40 

Transportes Aereos Militares Uruguayos. 
See Uruguayan Military Air Transport 

Treaty for the Prohibition of Nuclear 
Weapons in Latin America (Tlatelol- 
co Treaty), 191, 218 

Treaty of Acegua (1904), 21 

Treaty of Asuncion, xxxii 

Treaty of Montevideo, 11 

Treaty on the Nonproliferation of Nuclear 
Weapons, 218 

Treinta y Tres Department, 56; develop- 
ment in, 62; farming in, 119-20 

Tribunal of Administrative Claims, 157 

Triple Alliance, 15, 207 

Tupi-Guaram people, 6 

26 M. See 26th of March Movement of 
Independents 

26th of March Movement of Indepen- 
dents (26 M), 177 

UBD. See Democratic Blanco Union 
Ubilles, Francisco, 181 



UBP. See People's Blanco Union 

UC. See Civic Union 

UCB. See Colorado and Batllist Union 

UCU. See Civic Union of Uruguay 

UGT. See General Union of Workers 

UNDP. See United Nations Development 
Programme 

underemployment, 73 

unemployment: creation of jobs to pre- 
vent, 80; in Great Depression, 28; af- 
ter Korean War, 111; level, xxxiv, 76, 
110; under military regime, 109; as 
motivation for emigration, 68-69; un- 
der Sanguinetti regime, 112; of univer- 
sity graduates, 73; of urban poor, 76 

Unidad y Reforma. See Unity and Reform 

unification, 21, 101-2 

Union Blanca Democratica. See Demo- 
cratic Blanco Union 

Union Blanca Popular. See People's Blan- 
co Union 

Union Civica. See Civic Union 

Union Civica del Uruguay. See Civic Un- 
ion of Uruguay 

Union Colorada y Batllista. See Colora- 
do and Batllist Union 

Union General de Trabaj adores. See 
General Union of Workers 

union movement, 27 

Union Popular. See Popular Union 

unions, 5; activities of, 117; banned by 
Bordaberry, 5, 44; establishment of, 16; 
repression of, 72; white-collar, 72, 73 

unitary rule: versus federalism, 4 

United Batllism (BU), 174, 180 

United Nations: membership in, 191 

United Nations Economic and Social 
Council, 191 

United Nations Development Programme 
(UNDP), 51 

United Provinces of the Rio de la Plata: 
Banda Oriental incorporated into, 1 1 ; 
formed, 9 

United States, 45; anti-money-laundering 
agreement with, xxxii; criticism from, 
216; criticism of, 193; debt to, 141; debt 
rescheduling with, 30; emigration to, 
69; as export market, 145; free-trade 
pact with, xxxii; Human Development 
Index rank of, 52; industries, 30; in- 
fluence of, 208; installation of military 
bases by, xxviii, 32, 192; investment 
by, 24; loans from, 27, 192; materiel 



297 



Uruguay: A Country Study 



acquired from, 209; military assistance 
from, 209, 216; military relations with, 
217; relations with, 31, 192, 193-94; 
state visit to, 193; support for, 198; 
trade with, 16, 37 
United States Department of Defense, 216 
United States Department of State, 209 
Unity and Reform, 34, 36, 38, 41, 174, 
175 

University of Montevideo. See Universi- 
ty of the Republic 

University of the Republic, 19, 71, 87, 
105; autonomy of, 37, 88, 90, 225; en- 
rollments in, 89; expense of attending, 
87; faculties in, 31; law school, 168; 
medical school, 80; political activity in, 
88, 189, 225; relations of, with govern- 
ment, 40, 43; restructured, 31; stu- 
dents, 87; women at, 24 

upper class, 70; as proportion of popula- 
tion, 70 

urban areas: literacy rate in, 86; politi- 
cal affiliation in, 174; population in, 11, 
63; population growth rate in, 67; 
poverty in, 76 

urbanization, 66-67; effect of, on popu- 
lation growth, 62; of interior, 56 

urban migration, 67-68; by women, 78 

urban-rural conflict. See rural-urban 
conflict 

Urquiza, Justo Jose de, 14 

Uruguay: etymology of the word Uru- 
guay, xxiv-xxv 

Uruguayan Association of Bank Em- 
ployees (AEBU), 73 

Uruguayan Bishops Conference, 91 

Uruguayan Federation of Elementary 
Teachers, 73 

Uruguayan Military Air Transport 
(TAMU), 139 

Uruguayan National Airlines (PLUNA), 
139; privatization of, xxxi, xxxiv 

Uruguayan Press Association, 190 

Uruguayan Revolutionary Movement of 
Independents (MRO), xxxv, 177 

Uruguayan Syndicalist Union, 27 

Uruguay Round, xxxi, 193 

Usinas Electricas y Telefonos del Estado. 
See State Electric Power and Telephone 
Company 

UTE. See National Administration for the 
Generation and Transmission of Elec- 
tricity 



vacation communities, 60 

Vaillant, Victor, 174 

Varela, Jose Pedro, xxvii, 17-18, 19, 88 

Varela, Washington, 186 

Vassallo, Carlos, 178 

Vazquez, Tabare, xxx, xxxv, 152, 182, 

183; "co-habitation arrangement" of, 

152 

Vegh Villegas, Alejandro, 40; economic 

plan of, 45, 46 
Venezuela: emigration to, 69 
vice president, 159 
Viceroyalty of Brazil, 204 
Viceroyalty of the Rio de la Plata, 7, 204; 

dissolved, 9 
Viera, Feliciano, 25, 192 
Vierism, 26 
Vision magazine, 126 
voters, 182 

voting {see also suffrage), 170-72; compul- 
sory, xxvii, 152, 159, 170; rules govern- 
ing, 170-71; supervision of, 172; 
turnout, 152 



wage, minimum: adoption of, xxvii; in 
1980s, 74, 77; in 1990, 74 

wage and price freeze, 77, 116 

wage councils, 77, 116; abolished, 116; 
reestablished, 117 

wages, xxxi, 116; increases in, 117; in- 
dexation of, 118; negotiations for, 117 

wages, real, 37, 40, 98, 117, 118; decrease 
in, xxx, 45, 77, 107, 112, 115; recov- 
ery of, 77 

War of the Triple Alliance, xxvi-xxvii 

Weinstein, Martin, 155, 172, 186 

West Germany. See Federal Republic of 
Germany 

White Emblem, 175 

Williman administration, 22 

Williman, Claudio, 22 

women: barriers for, 159; civil rights of, 
34, 77, 159; and divorce, 25, 77-78; 
education of, 78, 88; employment of, 
72, 76, 78; maternity leave for, 37; roles 
of, 79; suffrage of, xxvii, 31, 78, 159; 
university education of, 24; urban 
migration by, 78 

wool: demand for, 102, 123; production 
of, 105, 122 

wool exports, xxv, xxviii, 37, 56, 63, 97, 



298 



Index 



102, 122, 145; attempts to revitalize, 
113; decline in, 119, 122; during 
Korean War, 105, 128; as source of for- 
eign exchange, 122 

workers, 22; blue-collar, 74-76; dismissed 
for political activities, 116; rights of, 4, 
31, 33; salaries of, 112; transfer of rural 
earnings to, 111; unemployment 
among, 112 

working conditions: reform of, 4, 27 

World Bank: loans from, 136-39 

World Cup, 27, 34 

World Federation of Trade Unions, 187 
World War I, 192 

World War II: exports during, xxviii, 
105; labor during, 116; United States 



influence during, 208 

Yang Shangkun, 197 

Yaro people, 6 

yerba mate, 79 

Young, Juan Guillermo, 178 

youth: rebelliousness of, 79, 180 

Zambia, 197 
Zerbino, Ricardo, 144 
Zeta, 190 
Zimbabwe, 197 

Zumaran, Alberto Saenz de, xxxiv, 75, 
181, 182 



299 



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Turkey 


550-72 


Philippines 


550-74 


Uganda 


550-162 


Poland 


550-97 


Uruguay 


550-181 


Portugal 


550-71 


Venezuela 


550-160 


Romania 


550-32 


Vietnam 


550-37 


Rwanda and Burundi 


550-183 


Yemens, The 


550-51 


Saudi Arabia 


550-99 


Yugoslavia 


550-70 


Senegal 


550-67 


Zaire 


550-180 


Sierra Leone 


550-75 


Zambia 


550-184 


Singapore 


550-171 


Zimbabwe 


550-86 


Somalia 






550-93 


South Africa 






550-95 


Soviet Union 






550-179 


Spain 






550-96 


Sri Lanka 






550-27 


Sudan 






550-47 


Syria 






550-62 


Tanzania 







302 



4fe 




PIN: 006948-000 



